What Shapes Consumer Choice and Financial Products? - A Review

19 Pages Posted: 29 Nov 2016 Last revised: 20 Apr 2017

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Souphala Chomsisengphet

Office of the Comptroller of the Currency (OCC)

Cheryl Lim

EDHEC Business School

Multiple version iconThere are 2 versions of this paper

Date Written: April 19, 2017


Central to the field of consumer finance is that consumers make financial decisions that do not always coincide with the ideal financial decisions ideally depicted in optimal economic models [Campbell, 2006]. In this review, we discuss developments in the field of household finance, focusing on how consumers make suboptimal financial decisions across different types of settings and factors that affect these suboptimal decisions. Rather than conducting a comprehensive survey, we focus more specifically on consumer choice in context of research in credit card borrowing, housing and mortgage debts, investments and savings decisions, as well as spending and consumption. We also discuss financial product design and marketing; regulatory landscape of lenders of consumer financial products; and consumer fintech. We also discuss five future research directions and considerations for researchers and policy makers.

Keywords: household finance, consumer finance, consumer behavior, consumer bias, choice inefficiencies, cognitive ability, financial literacy, financial education, consumer financial regulation, mortgage debt, credit card, personal investments, financial products, consumer fintech, P2P consumer lending

Suggested Citation

Agarwal, Sumit and Chomsisengphet, Souphala and Lim, Cheryl, What Shapes Consumer Choice and Financial Products? - A Review (April 19, 2017). Georgetown McDonough School of Business Research Paper No. 2875886, Available at SSRN: https://ssrn.com/abstract=2875886 or http://dx.doi.org/10.2139/ssrn.2875886

Sumit Agarwal (Contact Author)

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Souphala Chomsisengphet

Office of the Comptroller of the Currency (OCC) ( email )

400 7th Street, SW
Washington, DC 20219
United States
202-649-5533 (Phone)

Cheryl Lim

EDHEC Business School

58 rue du Port
Lille, 59046

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