Search

Everyday financial decision making and the awareness of the integrity of one's financial decision making abilities (or financial awareness) are both critical to study in older adults as they can help identify those at risk for making suboptimal financial decisions and prevent financial loss. In the current study, we examined the cognitive and cortical thickness correlates of financial decision making and financial awareness in 59 community-dwelling participants co-enrolled in a larger study (mean age=68.35 years (SD=5.5), mean education=15.91 (SD=2.36), 61% = women, 67% = White, 30% = Black participants). Data from standardized measures of financial decision making and cognition was investigated along with FreeSurfer (v. 5.3) derived thickness regions. Based on metacognitive frameworks, financial awareness was measured along with a well-validated measure of memory awareness. Results revealed that numeracy, executive functioning and vocabulary were associated with financial decision making, whereas in analysis adjusted for financial decision making, memory awareness relative to cognition was most strongly linked to financial awareness. No significant associations between thickness and financial decision making were found. However, both financial and memory awareness were associated with the same right-hemisphere temporal thickness regions underscoring the idea of a common substrate of awareness. Interestingly, our findings converge with the emerging work on financial exploitation in which the right sided temporal regions have been found to play a prominent role. Incorporating the contributing role of self-awareness in various models of financial exploitation will be an important consideration for future studies., (© 2021. The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.)

Objectives : This work examines the clinical utility of the scoring system for the Lichtenberg Financial Decision-making Rating Scale (LFDRS) and its usefulness for decision making capacity and financial exploitation. Objective 1 was to examine the clinical utility of a person centered, empirically supported, financial decision making scale. Objective 2 was to determine whether the risk-scoring system created for this rating scale is sufficiently accurate for the use of cutoff scores in cases of decisional capacity and cases of suspected financial exploitation. Objective 3 was to examine whether cognitive decline and decisional impairment predicted suspected financial exploitation. Methods : Two hundred independently living, non-demented community-dwelling older adults comprised the sample. Participants completed the rating scale and other cognitive measures. Results : Receiver operating characteristic curves were in the good to excellent range for decisional capacity scoring, and in the fair to good range for financial exploitation. Conclusions : Analyses supported the conceptual link between decision making deficits and risk for exploitation, and supported the use of the risk-scoring system in a community-based population. Clinical Implications : This study adds to the empirical evidence supporting the use of the rating scale as a clinical tool assessing risk for financial decisional impairment and/or financial exploitation.

Older adults with cognitive impairment are a population at great risk for financial exploitation. At-risk older adults often have difficulty reporting on their own financial abilities. Collecting information from trusted others is vital for professionals investigating the financial exploitation older adults. There are few reliable, valid, and standardized informant-report measures of financial capacity, and none that assess decisional abilities for an ongoing, real-world financial transaction. The present study sought to examine the psychometric properties of a new informant-report scale of financial decisional abilities in older adults. One hundred fifty participants were recruited to complete the Family and Friends and Interview regarding a known older adult's financial decisional abilities. A factor analysis identified two subscales. The full scale had adequate sensitivity and specificity to detect an informant's current concerns regarding financial exploitation. The Family and Friends Scale is a useful tool for collecting informant-report regarding an older adult's ability to make financial transactions.

Introduction: Cognitive impairment often occurs in people with multiple sclerosis (MS), and dysfunction involving executive function, new learning, and working memory is especially common. Compromised activities of daily living are linked to this cognitive impairment, and people with MS are apt to be unemployed and struggle to manage domestic responsibilities. Financial decision making is an important activity of daily living, and no study has examined whether it is compromised by neuropsychological dysfunction in people with MS., Method: A battery of neuropsychological tests and a measure of financial decision making (Financial Capacity Instrument, FCI: Marson, D. C. 2001. Loss of financial capacity in dementia: Conceptual and empirical approaches. Aging, Neuropsychology, and Cognition, 8, 164-181) were administered to 50 participants (34 patients with MS and 16 cognitively healthy adults). Based on the neuropsychological test results, 14 patients were classified as having cognitive impairment, and 20 had no significant impairment., Results: The impaired MS patients performed significantly worse than unimpaired patients and the healthy comparison group on most financial tasks. The impaired group retained abilities to count money and display adequate financial judgment. Regression analyses showed that measures of mental flexibility and working memory correlated most strongly with performance on the FCI domains across groups., Conclusions: Cognitively impaired patients with MS have degraded financial skills, which are linked to executive function and working memory deficits.

One of the challenges in preventing the financial exploitation of older adults is that neither criminal justice nor noncriminal justice professionals are equipped to detect capacity deficits. Because decision-making capacity is a cornerstone assessment in cases of financial exploitation, effective instruments for measuring this capacity are essential. We introduce a new screening scale for financial decision making that can be administered to older adults. To explore the scale's implementation and assess construct validity, we conducted a pilot study of 29 older adults seen by APS (Adult Protective Services) workers and 79 seen by other professionals. Case examples are included.

Increasingly, individuals are in charge of their own financial security and are confronted with ever more complex financial instruments. However, there is evidence that many individuals are not well-equipped to make sound saving decisions. This article looks at financial literacy, which is defined as the ability to process economic information and make informed decisions about financial planning, wealth accumulation, debt, and pensions. Failure to plan for retirement, lack of participation in the stock market, and poor borrowing behavior can all be linked to ignorance of basic financial concepts. Financial literacy impacts financial decision making, with implications that apply to individuals, communities, countries, and society as a whole. Given the lack of financial literacy among the population, it may be important to remedy it by adding financial literacy to the school curriculum., (© The Author(s) 2015.)

Low personal savings rates are an important social issue in the United States. We propose and test one particular method to get people to save more money that is based on the cyclical time orientation. In contrast to conventional, popular methods that encourage individuals to ignore past mistakes, focus on the future, and set goals to save money, our proposed method frames the savings task in cyclical terms, emphasizing the present. Across the studies, individuals who used our proposed cyclical savings method, compared with individuals who used a linear savings method, provided an average of 74% higher savings estimates and saved an average of 78% more money. We also found that the cyclical savings method was more efficacious because it increased implementation planning and lowered future optimism regarding saving money.

This article tests the effect of a novel credit card payment format—repayment-by-purchase—on consumers' payments toward credit card debt. In contrast to typical balance repayment, where consumers make repayments relative to a total amount owed, repayment-by-purchase prompts consumers to select items (e.g., a Starbucks coffee) or categories of purchase (e.g., restaurant and café purchases) and to make payments toward their related debt. A field experiment first suggests that customers who opted into repayment-by-purchase paid 12.18% more toward their statement balance than a control group. Subsequently, five lab experiments show that consumers repaying-by-purchase increase repayment by an average of 22.47% over typical balance repayment. Process evidence suggests that these differences may be driven by repayment-by-purchase's power to increase purchase salience, which in turns increases perceptions of progress toward reducing debt. Consistent with this theory, the effect of repayment-by-purchase on bill repayment emerges regardless of whether consumers repay durable versus nondurable goods, and for specific items or categories of purchases, as long as the bill uses labels that are concrete enough to raise past purchase salience. [ABSTRACT FROM AUTHOR]

This research challenges the entrenched belief that financial vulnerability affects only low-income consumers. Instead, most consumers across the socioeconomic spectrum experience varying degrees of financial vulnerability at different points during their lives, whether sporadically or chronically; vulnerability is dynamic and heterogeneous. The authors propose a novel, theory-driven definition of consumer financial vulnerability (CFV) as the risk of incurring future harm, given the consumer's current access to various financial resources. A new conceptual framework decouples "vulnerability" from "harm" to distinguish the state of CFV, its determinants (access to various interdependent financial resources), and the constructs it foreshadows (multiple interconnected forms of realized harm). Five research propositions follow: (1) financial resource volatility plays a vital role in CFV, (2) recovering from harm requires more financial resources than preventing harm, (3) a multiperiod lens is needed to assess CFV accurately, (4) greater financial resource access can increase CFV, and (5) generalized financial literacy is not a panacea for mitigating CFV. The propositions and their implications for marketing strategy, public policy, and consumer well-being offer a rich research agenda. The authors propose a measure of CFV—the probability that financial resources are insufficient to meet or exceed a harm threshold—for future empirical investigations. [ABSTRACT FROM AUTHOR]

Research has demonstrated that after making high goal progress, consumers feel liberated to engage in goal-inconsistent behaviors. But what happens after consumers make high progress in the context of joint goal pursuit? The authors examine how jointly made progress toward a joint goal pursued by couples affects subsequent individually made goal-relevant decisions. Across five experiments with both lab-created couples and married participants and financial data from a couples' money management mobile app, the authors show that after making high progress on a joint goal (vs. low or no progress), partners with higher relationship power are more likely to disengage from the joint goal to pursue personal concerns (e.g., indulge themselves, pursue individual goals), whereas partners with lower relationship power do not disengage from the joint goal and continue engaging in goal-consistent actions that maintain its pursuit. The authors elucidate the underlying mechanism, providing evidence that the joint goal progress boosts the relational self-concept of high- (but not low-) relationship-power partners, and this drives the effects. Importantly, they demonstrate the effectiveness of two theory-grounded and easily implementable interventions that promote goal-consistent behaviors among high-relationship-power consumers in the context of joint savings goals. [ABSTRACT FROM AUTHOR]

Financial decision making requires a sound handling of chance events. However, various studies have suggested that people are prone to illusion of control, i.e., the belief that prospects of a chancy event are better if they are involved in the randomisation process. This paper reports results from an experiment ( N = 420 ) suggesting that psychological characteristics moderate risk-taking behaviour under such circumstances. For example, we find that subjects high in sensation seeking buy more tickets of a risky lottery if they determine the winning numbers themselves and the random event lies in the future. The findings suggest that "illusion of control" effects are at least partly driven by underlying (idiosyncratic) emotions/preferences rather than an actual belief in control. Regarding applications, the results emphasise the importance of individual characteristics for the behaviour of decision makers in a financial context. [ABSTRACT FROM AUTHOR]

The current research introduces the concept of psychological ownership of borrowed money, a construct that represents how much consumers feel that borrowed money is their own. The authors observe both individual-level and contextual-level variation in the degree to which consumers feel psychological ownership of borrowed money, and variation on this dimension predicts willingness to borrow money for discretionary purchases. At an individual level, psychological ownership of borrowed money is distinct from other individual factors such as debt aversion, financial literacy, income, intertemporal discounting, materialism, propensity to plan, self-control, spare money, and tightwad–spendthrift tendencies, and it predicts willingness to borrow above and beyond these factors. At a contextual level, the authors document systematic differences in psychological ownership between different debt types. They show that these differences in psychological ownership manifest in consumers' online search behavior and explain consumers' differential interest in borrowing across debt types. Finally, the authors demonstrate that psychological ownership of borrowed money is malleable, such that framing debt using language lower in psychological ownership can reduce consumers' propensity to borrow. [ABSTRACT FROM AUTHOR]

Scarcity often encourages decisions that favor the present over the future. While prevailing theories largely attribute these decisions to myopic, impulsive decision making, five studies find support for an alternative, less prevalent perspective. We introduce the time horizon of threatened needs as an important determinant of scarcity's effect on intertemporal choice, demonstrating that people's decisions under scarcity reflect attempts to address threatened needs. Data from the Federal Reserve Bank of Philadelphia (Study 1) and preregistered studies (N = 10,297) show that time horizon moderates intertemporal decisions under scarcity. Study 2 manipulates scarcity perceptions among people engaged to be married, leading to increased preferences for sooner outcomes when wedding dates have shorter time horizons and a significant reversal when wedding dates have longer time horizons. Study 3 demonstrates that time horizon predicts intertemporal choice only when the intertemporal choice can help address threatened needs. Study 4 holds expense salience constant and replicates the moderation by time horizon using a paradigm that manipulates both scarcity and time horizon. Study 5 introduces multiple needs that vary in time horizon and importance, finding that decisions under scarcity reflect consideration of both the importance and temporal proximity of needs. These findings align with the perspective that people facing scarcity attempt to make decisions that are contextually appropriate. This work underscores the importance of understanding contextual variation in experiences of scarcity, suggests that decision making under scarcity is less thoughtless than presumed by the impulsive, myopic account, and offers recommendations for interventions for changing behavior under scarcity. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Abant Social Sciences / Abant Sosyal Bilimler Dergisi is the property of Journal of Abant Social Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Existing research demonstrates that financial constraints are widespread and influence consumer attention, preference, choice, and consumption in a variety of ways. Despite the growing knowledge of how financial constraints affect the consumer decision-making process, less is known about its impact on post-purchase behavior. This work examines whether financial constraints impact an important post-purchase behavior—word of mouth—and in what direction. Seven studies show that financial constraints reduce purchase-related word of mouth. This effect emerges across consumers' reported frequencies of discussing their purchases, as well as their intentions, desires, and real decisions to engage in word of mouth. This effect is explained by reduced anticipated pleasure of engaging in purchase-related word of mouth, which results from financially constrained consumers' belief that rehearsing their monetary expenditures will reinforce negative feelings about their limited financial situation. This effect cannot be similarly explained by other accounts such as impression management or the desire to hoard informational resources. Further, the authors show that the reduction in anticipated pleasure from word of mouth is specific to sharing about one's monetary expenditures. Thus, financial constraints reduce purchase-related word of mouth, but they do not universally decrease one's propensity to share. [ABSTRACT FROM AUTHOR]

Information modality refers to the use of different sensory channels to process information when making decisions: for example audible or visual information. This study examines the impact of information modality on investors making financial decisions. A Repertory Grid analysis is performed to derive features and functionality to create an Amazon Echo Show system for financial decision-making. This system is used to present a mixture of both audio and visual information to facilitate financial decision-making. The system is tested through the lens of the modality effect to determine the best method of presenting financial data to investors to inform their decision-making. Findings show the inferiority of audible information over visual information for retail investors' decision-making, especially for numerical data. However, with adjustments in information length and by prioritising non-numerical data, audible information could be of significant benefit when designing future systems to aid investor decision-making. [ABSTRACT FROM AUTHOR]

Why are people often uncomfortable dealing with financial decisions? We propose that people perceive financial decisions—more so than decisions in many other equally complex and important domains—as compatible with a cold, analytical mode of thinking and as highly incompatible with feelings and emotions. Consequently, the more people perceive themselves as inclined to rely on affect in their decisions, the more they experience self-concept incongruity with financial decisions (i.e., feeling that financial decisions are “not them”), and consequently show an increased tendency to avoid such decisions. Five studies demonstrate this phenomenon, using both consequential and hypothetical decisions; provide evidence for the proposed mechanism; and rule out alternative accounts, including perceived financial knowledge, expertise and self-efficacy perceptions, decision confidence, and preference for numerical information. The findings contribute to research on thinking styles and decision avoidance, and they underscore a unique characteristic of financial decisions that makes them stand out among many other decision types. In addition to their theoretical significance, the findings have practical implications for the communication of financial products and services. [ABSTRACT FROM AUTHOR]

Mental accounting research suggests that consumers prefer borrowing for longer-lasting purchases in order to receive benefits from the purchases as they pay for them. In contrast, two sets of archival data and five lab studies show that consumers are more willing to borrow for experiential versus material purchases, even though experiential purchases tend to have a shorter physical duration. Further, framing the same purchase as more experiential than material increases willingness to borrow. This effect occurs because purchase timing is more important for experiential purchases--a function of consumer's aversion to missing out on planned consumption. Thus, we moderate the proposed effect by varying whether the borrowing decision impacts planned consumption. Other differences between material and experiential purchases, such as scarcity or expected happiness, cannot similarly explain our results. Moreover, our conceptualization allows us to reconcile the apparent contradiction between the previous and current research by examining the relative impact of purchase-timing importance and payment-benefit duration matching in different contexts (i.e., "purchasing" and "source-of-funding" decisions). [ABSTRACT FROM AUTHOR]

Based on a 12-year bibliographic record collected from the Web of Science (Thomson Reuters) database, the present study aims to provide a macroscopic overview of the knowledge domain in financial decision making (FDM). A scientometric and bibliometric analysis was conducted on the literature published in the field from 2010 to 2021, using the CiteSpace software. The analysis focuses on the co-occurring categories, the geographic distributions, the vital references, the distribution of topics, as well as the research fronts and emerging trends of financial related decision making. The steady increase of papers published year by year demonstrated the increasing interest on this topic at the international level. The scientometric analysis of the literature showed that financial decision, investment decision, and financing decision stood out of the crowd of the research on FDM, suggesting their important role in FDM and its research. The results of citation burst analysis predicted the focus of topics, i.e., the impact of individual differences such as financial literacy, gender and age on FDM in the coming years. Different from the traditional approach of literature review, this bibliometric analysis offers a scientometric approach to reveal the status quo and the development trend of FDM by macro and quantitative means. In addition, future research directions for the field are recommended. [ABSTRACT FROM AUTHOR]

The citizens of Turkey were confronted with the shock of the Covid-19 pandemic while struggling with high inflation and unemployment rates, and a weakening domestic currency. However, a noteworthy phenomenon during the year 2020 was the performance of stock market in Turkey, which was mostly driven by local individuals. Not only stocks, but cryptocurrencies are also popular investments favored by the populace, collectively signaling an increase in risk-taking behavior. Learning more about this point of interest is even more intriguing when considering the ongoing poor economic circumstances. In this study, the financial product decisions of individuals living in Turkey are examined for the first year of pandemic. The data were collected using an Internet survey. Information on participant's demographics, financial product choices, declarations on changes in their interest in financial markets/products, financial status, and net income after Covid-19 was used. The results show that changes were associated with several product preferences, particularly with cryptocurrency. The findings indicate that regulators/authorities need to understand the reasons and conditions which influence those financial decisions and intervene if necessary because such excessive risk taking may eventually deteriorate social and financial wealth across the whole country. [ABSTRACT FROM AUTHOR]

Purpose -- This paper aims to analyze current research trends, identify theoretical perspectives, and identify research topics of behavioral bias in financial decision-making in the future. Research method -- To perform bibliometric analysis, this article uses a systematic literature review, as well as content analysis. This article uses a total of 51 publications between 2018 and 2022 as the sample for the literature review, directed by PRISMA. The tool used in analyzing bibliometrics is VOSviewer. Meanwhile, content analysis is conducted to build theoretical perspectives and proposed future research agendas. Result -- This systematic review explains the number of articles per year, most influential articles, leading journals, leading countries, leading authors, important keywords, and research cluster networks. Besides, this article also discovers seven behavioral biases that can be analyzed to gain a theoretical perspective on behavioral bias. The seven behavioral biases are Heuristic Bias, Self-Attribution Bias, Framing Bias, Herding Bias, Aversion Bias, Disposition Effect, and Overconfidence Bias,. In the scientific mapping analysis, important keywords are obtained, and the author's research cluster network is to discover topics that rarely researched to be offered in future research. Recommendation/significance/contribution -- In contrast to previous studies of behavioral bias, which were dominated by survey-based research, this paper provides a different reference by using a systematic literature review method that provides coverage of the main research issues and theoretical arguments about behavioral bias in financial decisions. In addition, this paper offers new ideas about potential research fields by identifying studies in developing countries that are still rarely carried out compared to developed countries. [ABSTRACT FROM AUTHOR]

Diversification—investing in imperfectly correlated assets—reduces volatility without sacrificing expected returns. Although the expected return of a diversified portfolio is the weighted average return of its constituent parts, the variance of the portfolio is less than the weighted average variance of its constituent parts. Our results suggest that very few people have correct statistical intuitions about the effects of diversification. The average person in our data sees no benefit of diversification in terms of reducing portfolio volatility. Many people, especially those low in financial literacy, believe diversification actually increases the volatility of a portfolio. These people seem to believe that the unpredictability of individual assets compounds when aggregated together. Additionally, most people believe diversification increases the expected return of a portfolio. Many of these people correctly link diversification with the concept of risk reduction but seem to understand risk reduction to mean greater returns on average. We show that these beliefs can lead people to construct investment portfolios that mismatch investors' risk preferences. Furthermore, these beliefs may help explain why many investors are underdiversified. This paper was accepted by Yuval Rottenstreich, decision analysis. [ABSTRACT FROM AUTHOR]

Many indebted consumers carry multiple credit cards with significant balances and do not generate enough income to pay off these balances in full at the end of each repayment period. In managing their debt over time, these consumers must decide how to allocate repayments across their debt accounts. This research examines how different monthly repayment allocations, varying from entirely concentrated into one debt account (i.e., a concentrated strategy) to equally dispersed across all debt accounts (i.e., a dispersed strategy), influence consumers' motivation to repay their debts. Evidence from a field study of indebted consumers with multiple debt accounts and from three experiments shows that concentrated (vs. dispersed) repayment strategies tend to boost consumers' motivation to become debt free, leading them to repay their debts more aggressively. Importantly, this motivating effect is most pronounced when the repayments are concentrated into consumers' smallest accounts because consumers tend to infer overall progress in debt repayment from the greatest proportional balance reduction (proportion of starting balance repaid) within any one account. These findings advance our understanding of how consumers repay their debts and help pinpoint the psychological process by which debt repayment strategies affect consumers' motivation to get out of debt. [ABSTRACT FROM AUTHOR]

Decisions about life annuities are an important part of consumer decumulation of retirement assets, yet they are relatively underexplored by marketing researchers studying consumer financial decision making. In this article, the authors propose and estimate a model of individual preferences for life annuity attributes using a choice-based stated-preference survey. Annuities are presented in terms of consumer-relevant attributes such as monthly income, yearly adjustments, period certain guarantees, and company financial strength. The authors find that these attributes directly influence consumer preferences beyond their impact on the annuity's expected present value. The strength of the direct influence depends on how annuities are described: when annuities are represented only through basic attributes, consumers undervalue inflation protection, and preferences are not monotonically increasing in duration of period certain guarantees. When descriptions of annuities are enriched with cumulative payment information, consumers no longer undervalue inflation protection, but nonlinear preferences for period certain options remain. The authors find that among annuities with the same expected payout but different annual increases and period certain guarantees, the proportion of consumers who choose the annuity over self-management can vary by more than a factor of 2. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Society & Social Work is the property of Journal of Society and Social Work and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Artificial intelligence (AI) uses statistical modeling to make predictions and in finance industry usage of Artificial Intelligence (AI) algorithms has increased several folds in recent years to detect fraud, automate trading activities, portfolio management, customer relationship management and to deliver financial advisory services to investors. Inherent ability of AI to analyze several data sets within a short span of time as well as to build alternative business scenarios to facilitate decision making helps to improve the financial performance of an organization that too without being unambiguously programmed for estimated outcomes. The research looks at the effectiveness and acceptability of AI implementation within Indian Financial Industry and the level of improvement that this integration has generated. Research Discusses some modern AI tools being utilized in the Financial Industry and tries to explore the comfort level and expectations of employees of Indian financial industry from the use of AI. It also makes an effort to statistically check the level of integration and kind of relationship that may exist between AI systems and functionalities and effectiveness that they have brought in Financial Decision Making across all sectors and players within Indian financial industry and across all levels of job positions within different financial organizations. [ABSTRACT FROM AUTHOR]

Traders and investors are aware that emotional processes can have material consequences on their financial decision performance. However, typical learning approaches for debiasing fail to overcome emotionally driven financial dispositions, mostly because of subjects' limited capacity for self-monitoring. Our research aims at improving decision makers' performance by (1) boosting their awareness to their emotional state and (2) improving their skills for effective emotion regulation. To that end, we designed and implemented a serious game-based NeuroIS tool that continuously displays the player's individual emotional state, via biofeedback, and adapts the difficulty of the decision environment to this emotional state. The design artifact was then evaluated in two laboratory experiments. Taken together, our study demonstrates how information systems design science research can contribute to improving financial decision making by integrating physiological data into information technology artifacts. Moreover, we provide specific design guidelines for how biofeedback can be integrated into information systems. [ABSTRACT FROM AUTHOR]

The authors propose that attempts to increase consumers' objective knowledge (OK) regarding financial instruments can deter willingness to invest when such attempts diminish consumers' subjective knowledge (SK). In four studies, the authors use different SK manipulations and investment products to show that investment decisions are influenced by SK, independent of OK. Specifically, they find that (1) willingness to pursue a risky investment increases when SK is high (vs. low) relative to a prior investment choice (Study 1); (2) willingness to enroll in a retirement saving program is enhanced by asking consumers an easy (vs. difficult) question about finance, thereby increasing SK (Study 2); (3) technically elaborating information about a mutual fund diminishes SK regarding that investment and decreases choice of that fund (Study 3); and (4) consumers invest less money in funds when missing information is made salient, holding the objective investment information constant (Study 4). Furthermore, the effects in Studies 2-4 are mediated by participants' self-rated SK. The authors propose that effective financial education must focus not only on imparting relevant information and enhancing OK but also on promoting higher levels of SK. [ABSTRACT FROM AUTHOR]

Background and Objectives Context can influence or overwhelm the intellectual and cognitive aspects of financial decision making but has only recently received increased attention. The construct validity of conceptual subscales from a financial decision-making scale was examined in the context of their relationship to financial exploitation. Research Design and Methods Two hundred forty-two community-based participants were recruited into the study. The final sample contained 242 participants. Measures included demographic variables, conceptually derived contextual items, and neurocognitive measures. Seventeen of the 34 contextual items investigated differentiated financially exploited and nonexploited older adults. Combining these 17 contextual items led to the creation of a new scale: the Financial Exploitation Vulnerability Scale (FEVS). Correlational analyses and area under the curve analyses were used to examine the relationship between this new scale of contextual items and other measures and to determine how clinically meaningful the scale was in the current sample. Results Contextual items were powerful discriminators between those who were exploited and those who were not. The new scale of contextual items (the FEVS) demonstrated good internal consistency (Cronbach's alpha = 0.82) and a strong area under the curve (receiver operating characteristic = 0.80), thereby indicating good clinical significance and evidence for construct validity. Discussion and Implications We examined the conceptually derived subscales of financial awareness, psychological vulnerability, and relationship strain and how these relate to financial exploitation. Our major finding is that contextual items differentiated between exploited and nonexploited adults, which demonstrate the importance of measuring context in financial decision making and exploitation. A new scale for measuring contextual items was introduced. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of the COVID-19 pandemic on household investment decisions using a novel survey conducted by the Survey and Research Center for China Household Finance. We use linear probability and probit models to analyze the effects of COVID-19 at the household level. Our results show that households who know someone infected with COVID-19 lose confidence in the economy. They are more likely to change their risk behavior and become risk-averse. Further, COVID-19 increases the probability that a household will change its investment portfolio. More specifically, it causes a 9.15% decrease in the total investment amount. [ABSTRACT FROM AUTHOR]

The goal of the study was to explore whether materialism, defined as being overly interested in money and material goods and attributing them too big a role in life, is related to consumer financial decisions and advertising perception. The study was conducted among members of an internet research panel on a nationwide random quota sample (n=1.062). The results showed that many consumer decisions depend on the level of materialism as measured by the Material Values Scale (MVS) [1]. More materialistic people showed a higher inclination to spending money over saving. Materialism is also influencing consumer decisions relating to borrowing money: people with higher materialistic attitudes take out credits or loans and do so irresponsibly more often. Moreover, nonmaterialists while confronted with a marketing offer which is beyond their financial capabilities more often choose to resign, whereas materialists rather decide on finding additional money (from extra work or loans). Materialists also react differently to advertising communication referring to materialistic values. An advertising message referring to materialistic values decreases the perception of the product and company in the eyes of nonmaterialists, while materialists react to such communication less negatively. [ABSTRACT FROM AUTHOR]

Objectives: This article examines the convergent validity and clinical utility of the 34-item short form of the Lichtenberg Financial Decision Rating Scale (LFDRS-SF). A briefer scale can lead to enhanced and efficient use of a person-centered approach to the assessment of financial decision-making. Methods: Using data on 200 community-dwelling older adults from Lichtenberg and colleagues (2017a), convergent validity was examined with cognitive and financial management measures using a correlational and regression approach. Receiver operating curve analyses for predicting decision-making ability classification and suspected financial exploitation classification were used to evaluate clinical utility. Results: The LFDRS-SF total risk score was significantly correlated with both cognitive and financial management measures, and the regression analysis predicted 9% of the LFDRS-SF measure. These results demonstrate not only convergent validity, but also the conceptual and empirical uniqueness of financial decision-making. Conclusions: The LFDRS-SF is a valid tool to assess real-world financial decision-making abilities. Clinical Implications: The LFDRS-SF offers an efficient way to assess financial decision-making. Training on the tool and automatic scoring and recommendations for next steps can be found at [ABSTRACT FROM AUTHOR]

Copyright of Administração: Ensino e Pesquisa is the property of Administracao: Ensino e Pesquisa and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In four studies, the authors show that consumers' savings can be increased or decreased merely by changing the way consumers think about their saving goals. Consumers can (1) either specify or not specify an exact amount to save (goal specificity) and (2) focus on either how to save or why to save (construal level). The results illustrate that specific goals help consumers save more when the saving goal is construed at a high level but that nonspecific goals help consumers save more when the saving goal is construed at a low level. The same pattern of results occurs with anticipated saving success and actual savings. Mediation analyses reveal that for high-level construers, specific (vs. nonspecific) goals lead to success because they are perceived as more important. However, specific (vs. nonspecific) goals are also perceived as more difficult, which is more discouraging for low-level construers. [ABSTRACT FROM AUTHOR]

Decisions often involve trade-offs between a more normative option and a less normative but more tempting one. The authors propose that the intrapersonal conflict that is evoked by choices involving incompatible goals can be resolved through scope-insensitive justifications. The authors describe one such mechanism, the 'mere token' effect, a new phenomenon in decision making. They demonstrate that adding a certain and immediate mere token amount to both options increases choices of the later-larger option in intertemporal choice and of the riskier-larger option in risky choice. The authors find this effect to be scope insensitive, such that the size of the token amount does not moderate the effect. They show that intrapersonal choice conflict underlies the mere token effect and that reducing the degree of conflict by increasing the psychological distance to the choice outcomes debiases the effect. Moreover, they show that the mere token effect is enhanced when (1) opposing goals in choice are made salient and (2) the choice options represent a starker contrast that generates greater conflict. The authors empirically rule out alternative explanations, including diminishing marginal utility, normative and descriptive utility-based models, liquidity constraints, and naive diversification. They discuss the direct implications of the mere token effect for the marketing of financial services and, more generally, for consumer preference toward bundles and multiattribute products. [ABSTRACT FROM AUTHOR]

Microfinancing, or small uncollateralized loans to entrepreneurs in the developing world, has recently emerged as a leading contender to cure world poverty. Our research investigates the characteristics of borrowers that engender lending through Kiva, a popular organization that connects individual lenders to borrowers through online microfinance. Lenders favor individual borrowers over groups or consortia of borrowers, a pattern consistent with the identifiable victim effect. They also favor borrowers that are socially proximate to themselves. Across three dimensions of social distance (gender, occupation, and first name initial), lenders prefer to give to those who are more like themselves. [ABSTRACT FROM AUTHOR]

People have a tendency to sell stocks more quickly if their value has increased since the time they were purchased than if their value has decreased during this period. This “disposition effect” can sometimes have negative financial consequences. Based on an analysis of transaction data in a simulated trading environment, Study 1 provides evidence of the disposition effect in a newly emerging Internet-based stock trading (“e-trading”) situation. Three laboratory studies then examine the mechanisms that underlie the effect. The magnitude of the disposition effect is unaffected by experimental manipulations of the subjective likelihood of future gains or losses. However, it is eliminated by inducing participants to define gains and losses in similar subjective units. Furthermore, the effect depends on whether participants make selling decisions on their own stocks or serve as an agent for someone else. Thus, the disposition effect is largely a result of differences in the subjective value that participants attach to possible gains and losses rather than of differences in their beliefs that these outcomes will occur. The authors discuss theoretical and managerial implications of the findings. [ABSTRACT FROM AUTHOR]

This research examines when and why a threat to self-image influences saving intentions. Data from a set of seven studies, comprising a large-scale survey and 6 experiments, show that when individuals experience a self-image threat, they generate negative expectations about their future. Consequently, these individuals show a greater propensity to save money compared with nonthreatened individuals. We demonstrate that this effect diverges from the effects of environmental threats (e.g., resource scarcity) on saving, and find that it is more likely to occur among individuals with strong rather than weak beliefs in the instrumentality of money. Finally, we observe that the relationship between self-image threat and saving intentions is attenuated under the following conditions: (a) when individuals are induced to adopt positive future expectations; (b) when individuals perceive themselves as having abundant social connections, a perception that buffers their anxiety about the future; or (c) when individuals' attention is directed, through self-affirmation, to important aspects of their lives that are irrelevant to the threat. [ABSTRACT FROM AUTHOR]

Consumer use of social media has witnessed significant growth in recent years. Due to its unregulated, user-generated, and poorly censored format, social media use has blurred the line between the fake and the true and can result in mass dissemination of inaccurate and false information, thereby impacting national politics, election outcomes, and social interactions between consumer social clusters. In the unique context of financial decisions, consumer reliance on social media can significantly increase the risk of making poor financial decisions. This study examined the impact of cognitive style, consumer gullibility, and demographics on consumers' reliance on social media for financial decision making. The results of a US national survey identify consumer characteristics which contribute to increased reliance on social media in financial decision making. The findings point to consumer vulnerabilities associated with psychographic and demographic attributes of consumers. The paper concludes with recommendation-related consumer education and public protection measures. [ABSTRACT FROM AUTHOR]

The verification of the influence of mental processes on financial decisions comes to insert in the current context of economic and financial studies the concept of behavioral finances. Such a perspective argues that the non-rational attitudes of individuals can act as a modifier of the behavior of financial variables. The purpose of this study is to investigate, together with federal public servants of an institution in the Minas Gerais triangle, whether in the process of financial decision making, they are averse to the uncertainty bias, as well as whether there is gender influence on the presented values. From the study of Gneezy, List and Wu (2006), a questionnaire was applied to 60 public servants approached. It is concluded that the bias of uncertainty is present in this public and that it is possible to identify a greater aversion to the bias of the uncertainty about the female gender in comparison to the masculine respondent. In the end, it is verified that the research provides an understanding about the behavior of the public addressed as financial decision makers and future financial investors and can be used as support in the market study for financial managers and operators. In addition, it provides individuals with an understanding that their emotions influence their financial decisions, thus minimizing errors in situations where they are most required. It is also verified the need to apply this study considering other variables present in the financial decision-making process. [ABSTRACT FROM AUTHOR]

Abstract Determining the most suitable mobile communications network and service plan can be daunting for many consumers. We consider whether individuals with lower numeracy need more assistance than other consumers when making choices amongst hypothetical mobile service tariffs and whether changes to the environment will improve consumers' decisions. We find that people with poor numeracy are less likely to choose the lowest cost plan and overpay for their mobile services. We also find that the regulatory initiatives currently available to help consumers' decisions should be customized to address the interests of low numerate and other consumers. Highlights • Individuals with higher numeracy make better choices of mobile service plans. • Having usage certainty enables consumers to make better choices of mobile service plans. • Complexity in the number of plans to consider can be a barrier to decision quality. [ABSTRACT FROM AUTHOR]

Financial decisions can have lasting consequences for consumer welfare and other important decisions. This review summarizes contemporary literature on financial decision making vis‐à‐vis the promotion of financial well‐being, outlining work on financial behaviors that contribute to financial well‐being, psychosocial determinants of financial well‐being, and the role of situational factors in financial well‐being. In addition to reviewing recent research, this article draws attention to some open questions in the field and proposes a trajectory for productive pathways of future research. [ABSTRACT FROM AUTHOR]

The emerging literature on aging and decision making posits that decision‐making competence changes with age, as a result of age differences in various cognitive and noncognitive individual‐differences characteristics. In a national life‐span sample from the United Kingdom (N = 926), we examined age differences in financial decisions, including performance measures of sunk cost and credit card repayment decisions, and self‐report measures of money management and financial decision outcomes. Participants also completed four individual‐differences characteristics that have been proposed as relevant to financial decision making, including two cognitive ones (numeracy and experience‐based knowledge) and two noncognitive ones (negative emotions about financial decisions). First, we examined how age was related to the four financial decision‐making measures and the four individual‐differences characteristics. Older age was correlated to better scores on each of the four financial decision‐making measures, more experience‐based knowledge, less negative emotions about financial decisions, whereas numeracy and motivation were not significantly correlated with age. Second, we found that considering both the two cognitive and the two noncognitive individual‐differences characteristics increased predictions of financial decision making, as compared with considering either alone. Third, we examined how these four individual‐differences characteristics contributed to age differences in financial decision making. Older adults' higher levels of experience‐based knowledge and lower levels of negative emotions seemed to especially benefit their financial decision making. We discuss implications for theories on aging and decision making, as well as for interventions targeting financial decisions. [ABSTRACT FROM AUTHOR]

Highlights • Representation of highly uncertain information using PF/IVPF sets. • Development of risk attitude-based score functions for PF/IVPF values. • Construction of risk attitudinal assignment models in the PF/IVPF context. • Application to financial decision-making problems. • Comparative analysis with other outranking approaches. Abstract The aim of this paper is to develop a novel outranking method using a risk attitudinal assignment model under complex uncertainty based on Pythagorean fuzzy (PF) sets and interval-valued Pythagorean fuzzy (IVPF) sets. Additionally, this paper applies the proposed methodology to address financial decision-making problems to investigate its applicability and effectiveness in the real world. These developed methods and techniques can provide a new viewpoint for capturing the amount of information conveyed by PF and IVPF values and can fully take into account the decision maker’s attitude towards risk-taking in the face of high uncertainty. Considering the diverse attitudes toward risk neutrality, risk seeking, and risk aversion, this paper introduces novel measures of risk attitude-based score functions within the PF/IVPF environments and investigates their desirable and useful properties. These properties provide a means of establishing linear orders and admissible orders in the PF/IVPF contexts. This means that the proposed measures can overcome some drawbacks and ambiguities of the previous techniques through score and accuracy functions and can address incomparable PF/IVPF information more effectively. As an application of the risk attitude-based score functions, this paper develops novel risk attitudinal assignment models to establish a useful outranking approach for solving multiple criteria decision-making problems. Two algorithms for PF and IVPF settings are developed based on the concepts of a precedence frequency matrix and a precedence contribution matrix for conducting multiple criteria evaluation and the ranking of alternatives. A financing decision on aggressive/conservative policies of working capital management is presented to demonstrate the applicability of the proposed outranking approach in real situations. Moreover, a comparison to the technique of risk attitudinal ranking methods is investigated to validate the advantages of the proposed methodology. Furthermore, a comparative analysis with a newly developed outranking method, the IVPF-ELECTRE (for the elimination and choice translating reality), is conducted via an application to the investment problem of software development projects. Compared with these benchmark approaches, the proposed methods can produce a more reasonable and persuasive result for ranking the order relationships of alternatives in the highly uncertain context. The practical studies and comparative discussions demonstrate an excellent performance of the developed methodology that is effective and flexible enough to accommodate more-complex decision-making environments. [ABSTRACT FROM AUTHOR]

The aim of the research is to analyse neurological aspects for investment decisions making process, which is a result of complex neurophysiological processes, provides constant revaluation of the statistic information about the problem, balancing of various emotional aspects and weighting of many factors' importance. The study contains wellgrounded generalization and structuring of the scientists' global scientific heritage regarding the explanation of the mechanism to connect the financial and emotional grounds in the investment decisions making process. The article consists of four parts each of which deals with the study regarding the specific behavioural aspects of the economic choice. The author describes the neurological nature to form the signal for the economic decision-making process, logical order of prediction and selection, psychoneurological mechanisms to define the levels and the expected benefit and risk ratio by the economic entities as fundamental categories of modern microeconomic theory, in the first part. The second part of the article deals with the investigation of neurological mechanisms, as a result of which emotional factors (excitement and disappointment, pride and discomfort, feelings of regret, fear of suffering losses, greed, risk, fear to regret the wrong choice, victory effect etc) provoke investors to make irrational decisions in the investment sphere, negate common sense and logic. The third part of the article deals with the role of neurotransmitters (small endogenous chemical messengers of different types (dopamine, serotonin, norepinephrine), with which brain cells interact through synaptic space) in the financial decision-making process. The fourth part of the article describes the neuron resonance phenomenon, which explains the empathy, formation of the reliable relations of customers and partners in business. This phenomenon is caused by the action of mirror neurons (brain cells that react when a person performs a certain physical movement and also observing how the other person does the same, are responsible for imitation, awareness and understanding of the actions, intentions or emotions of another person), which make one of the most significant inventions in the neuroscience. [ABSTRACT FROM AUTHOR]

The paper defines the essence of financing models (financing patterns) from the viewpoint of different scientific approaches. Using the operational viewpoint it then analyses the use of different financing model by large and medium-sized agricultural enterprises of Ukraine and the Czech Republic. Based on this analysis, there are identified the basic financing models in Czech and Ukrainian agriculture. The changes that occurred in the role of the debt financing model for enterprises in the sector in both countries are determined. The role of debt financing model for agricultural enterprises in Ukraine, in contrast to the Czech Republic, significantly increased in recent years. The causes of this phenomenon are associated with the deterioration of the development of the financial system in the country, which also projects into worsening conditions for self-financing. It is the sign of a systemic crisis in agriculture. But in the Czech Republic the role of equity financing model of agricultural enterprises increased on the background of improving conditions for self-financing and, consequently, increasing their independence from creditors. The volume of liabilities is distributed between the agricultural enterprises very unevenly (especially in Ukraine), and it reflects not only the existing differentiation of size of these enterprises, but different access to external funds in general. The results of the paper deny the findings of some researchers that in countries with a less developed economy and financial system, the role of debt financing model is lower due to a lack access to the loans. [ABSTRACT FROM AUTHOR]

Exponential growth effects play a major role in many household finance decisions. A systematic bias in dealing with exponential growth can lead to poor savings and debt decisions. In this paper, we extend previous research on the exponential growth bias in the savings and debt domains and provide a first experimental link between these two important fields of consumer financial decision making. We develop a measure for the exponential growth bias that naturally extends over different domains and parameter settings, and we explore the ramifications of being acquainted with the basic formula of exponential savings growth. Specifically, we analyze whether such formula knowledge helps only in calculating simple compound interest scenarios with a pocket calculator or if it provides benefits that go beyond this narrow field of application. We observe that-even without a pocket calculator-individuals who know the compound interest formula provide less biased estimates for problems from the savings domain and also for slightly more complicated debt amortization problems that also build on exponential growth effects. We conclude that being acquainted with the compound interest formula provides some intuitive grasp of exponential effects that can be helpful in a broader range of household finance decisions. At the same time, we observe that too much dependence on a calculator can have adverse effects: when equipped with a pocket calculator, a number of participants, both aware and unaware of the compound savings formula, provided persistently insensible answers greater than the initial loan balance in the debt domain. [ABSTRACT FROM AUTHOR]

This article draws on a large qualitative study (N = 123) to develop an understanding of young people’s financial lives as constituted through experiences of time and temporality. Extending recent accounts of temporality as experienced and lived through our embedded location in the life course, we develop the concept of financial timescapes as a means of focusing on the ways that individual and personal financial capacities are situated in broader economic and cultural topographies of youth. The findings focus on the acquisition, deployment and consequences of financial lives as temporally situated and experienced by 16–26-year-old Australians. By doing so, we draw attention to how financial timescapes influence the constitution, navigation and cohering of young people’s financial lives. Understanding the significance of financial timescapes to young people’s experiences and socially embedded capacities thus helps to inform a sociological understanding of monetary decision making, financial behaviours and financial trajectories across the life course. [ABSTRACT FROM AUTHOR]

Study's purpose was to investigate distal and proximal contextual influences affecting resource decisions of Latinos of Mexican origin living in the US. Deacon and Firebaugh's (1988) family resource management theory guided the study. Documentation status and transnationalism were primary distal influences. Primary proximal influences included strength and depth of relationship currency, family remittances to Mexico, present-time orientation, orientation to resource access, and a holistic well-being definition. Five couple work/financial patterns existed; the most prominent was where husbands worked and wives managed the money. Spousal interdependence in discussing and in making final financial decisions created resiliency in their new, challenging environment. Education for this audience needs to address literacy level, language, documentation status, relevancy and flexibility in curriculum content and educational timing. [ABSTRACT FROM AUTHOR]