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I show that an introduction of a liability on firms, proportional to the difference between consumers' beliefs and the effective terms of purchase/contract, can improve both social welfare and consumer surplus, depending on the relative magnitudes of: 1) decrease in the gap between the beliefs...
Persistent link: https://www.econbiz.de/10012971834
Credit card companies charge an interchange fee for each transaction, and almost half of this fee is returned to consumers in the form of a reward or perk program. Among credit card users who do not use cards for borrowing (convenience users), rewards are a means to negotiate the implicit price...
Persistent link: https://www.econbiz.de/10013085232
A timely reminder on an app or website prompts delinquent credit card debtors with strong credit records to repay but is ineffective for debtors with weak credit records. We study field data from a 2015-16 randomized controlled trial of a broadcast reminder received by 30-days-overdue credit...
Persistent link: https://www.econbiz.de/10013234260
Some food items that are commonly considered unhealthy also tend to elicit impulsive responses. The pain of paying in cash can curb impulsive urges to purchase such unhealthy food products. Credit card payments, in contrast, are relatively painless and weaken impulse control. Consequently,...
Persistent link: https://www.econbiz.de/10013132943
Open-loop prepaid cards are becoming a mainstream payment instrument in the United States. In addition, businesses and governments increasingly view them as a less expensive alternative to checks for disbursing payroll and benefits.There are few studies that examine how consumers actually use...
Persistent link: https://www.econbiz.de/10013102233
This study uses a unique data source on consumer credit card usage to examine the impact of billing disclosure changes mandated by the Credit Card Accountability, Responsibility and Disclosure (CARD) Act on consumers' debt payment behaviors. Data are from the Ohio State University's Consumer...
Persistent link: https://www.econbiz.de/10013108073
In recent years, some Canadian politicians and powerful interest groups have issued increasingly vocal calls for dramatic regulatory interventions into the country's payment cards system. In particular, they have called for a "hard cap" price-controls on interchange fees, a ban on contractual...
Persistent link: https://www.econbiz.de/10013073767
This study shows that individuals' habits in grocery shopping are incrementally useful in predicting their credit card payment behaviors and that such incremental predictive power can translate into incremental profits for firms. Guided by prior work, we identify five broad grocery shopping...
Persistent link: https://www.econbiz.de/10013217533
The Federal Credit CARD Act of 2009 made important changes to the credit card market, including a requirement that penalty fees be reasonable and proportional to the borrower's violation. In interpreting "reasonable and proportional" an understanding of the nature of penalty fees is essential....
Persistent link: https://www.econbiz.de/10013111124
For many goods and services, such as cellular-phone service and debit-card transactions, the price of the next unit of service depends on past usage. As a result, consumers who are inattentive to their past usage but are aware of contract terms may remain uncertain about the price of the next...
Persistent link: https://www.econbiz.de/10010195105