Chicago Booth associate professor of Marketing, Abigail Sussman, suggests employers and the federal government have a role in this, along with consumers.
- By January 11, 2018
Abigail 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 lead to financial management mistakes. 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 in consumer decision-making. 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, as well as 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 increasing consumer savings and managing debt.
Read more about Professor Sussman’s research in UChicago News.
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