Cultivating Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing
83 Pages Posted: 24 Oct 2019 Last revised: 22 Jan 2021
Date Written: December 2020
We report the results of a longitudinal intervention with students across five universities in China designed to reduce online consumer debt. Our research design allocates individuals to either a financial literacy treatment, a self-control training program, or a zero-touch control group. The self-control training program features detailed tracking of spending and borrowing, budgeting, and introspection about consumption choices. These sessions reduce future online borrowing and delinquency charges, mainly driven by a reduction in entertainment-related spending and borrowing. In contrast, financial literacy interventions improve test scores but only marginally affect borrowing. Our results suggest that cultivating self-regulation and budgeting skills can largely improve borrowing behavior on e-commerce platforms.
Keywords: Self-control, Online borrowing, Consumer credit, FinTech, Financial literacy
JEL Classification: G51, G53, D14, D18, G23, G21
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