Using data from multiple card issuers, we show that the most common penalty fee type incurred by credit card holders – late payment fees – declines sharply over the first few months of card life. This phenomenon is wholly due to some consumers adopting automatic payments after a late payment...

We provide the first tests to distinguish whether individual investors equally balance their overall portfolios (naïve portfolio diversification—NPD) or engage in naïve buying diversification (NBD)—equally balancing values in same-day purchases of multiple assets. We find NBD in purchases...

In Gathergood et al. (2019), we studied credit card repayments using linked data on multiple cards from the United Kingdom. We showed that individuals did not allocate payments to the higher interest rate card, which would minimize the cost of borrowing, but instead made repayments according to...

In Gathergood et al. (forthcoming), we studied credit card repayments using linked data on multiple cards from the United Kingdom. We showed that individuals did not allocate payments to the higher interest rate card, which would minimize the cost of borrowing, but instead made repayments...

In the attraction effect, adding a dominated third option to a choice set of two options can reverse the preference for the original two options, and even increase one of the option's choice share. This constitutes a violation of the axioms of regularity and independence from irrelevant...

We provide the first tests to distinguish whether individual investors equally balance their overall portfolios (naïve portfolio diversification—NPD) or engage in naïve buying diversification (NBD)—equally balancing values in same-day purchases of multiple assets. We find NBD in purchases...

Loss aversion is widely regarded as the most robust and ubiquitous finding in behavioural economics. According to the loss aversion hypothesis, the subjective value of losses exceeds the subjective value of equivalent gains. One common assumption in the literature is that this asymmetry...

We study how individuals repay their debt using linked data on multiple credit cards. Repayments are not allocated to the higher interest rate card, which would minimize the cost of borrowing. Moreover, the degree of misallocation is invariant to the economic stakes, which is inconsistent with...

We study how individuals repay their debt using linked data on multiple credit cards. Repayments are not allocated to the higher interest rate card, which would minimize the cost of borrowing. Moreover, the degree of misallocation is invariant to the economic stakes, which is inconsistent with...