Abstract: Financial capability requires understanding measures of consumer credit cost and using them appropriately in credit judgements and decisions. In three studies, UK adults’ understanding and use of credit cost and duration information were investigated from a bounded rationality...

A reversal of preference between compound and simple risks was demonstrated in the context of compound gambles with loss elements transparently in common. The role of predecision editing heuristics in this violation of the Invariance Principle was explored in a process-tracing study. Verbal...

A previous study found that credit consumers' decisions to purchase payment protection insurance (PPI) were surprising insensitive to changes in cost and level of cover. This was investigated further in a randomized-groups experiment in which these two factors and the cost of credit alternatives...