Abigail Sussman: Why consumers make bad financial decisions and how to help

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One in five part-time students chooses to pursue a concentration in marketing management while earning their MBA at Chicago Booth, and there are many resources available for students interested in making marketing a focus of their degree.

The James M. Kilts Center for Marketing advances marketing at Chicago Booth by facilitating faculty research, supporting innovations in the marketing curriculum, funding scholarships for MBA and PhD students, and creating engaging programs aimed at enhancing the careers of students and alumni. Each year, hundreds of students take part in events, marketing labs, and the Part-Time Booth Marketing Club. The Kilts Center has gathered some recent features on program faculty and alumni whose work is helping to revolutionize the industry.

Photo of Abigail SussmanAbigail Sussman is an associate professor of Marketing at Chicago Booth and a Faculty Scholar at True North Communications, Inc. As a behavioral scientist, Sussman’s research focuses on the psychological biases that inform consumer decision-making and can result in errors in financial management. Professor Sussman is the co-author of “Behaviorally Informed Policies for Household Financial Decisionmaking,” a new paper that examines the consumer behaviors that lead to monetary mistakes and offers strategies for remedying them.

The researchers found that a lack of background research can play an important role. They explain that instead of weighing all options, consumers often “focus on limited local trade-offs, instead of broad outcomes, leading to inefficient spending, borrowing and investment outcomes.” Other factors like how financial choices will be viewed from a social context and too little or too much trust in financial advisers may also contribute.

The paper suggests that consumers, employers, and the federal government should take on a more proactive role in managing individual’s finances. Initiatives like automatically enrolling employees in retirement savings plans, offering visual reminders about credit card debt, and providing borrowers with more individualized mortgage guidance can go a long way toward improving consumer debt. 

Read more about Professor Sussman’s research in UChicago News.

If you would like to learn more about Chicago Booth’s marketing concentration, please contact the Evening MBA and Weekend MBA Admissions staff. For more information about the Kilts Center and resources for students, please visit their website.