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Balancing act: new evidence and a discussion of the theory on the rationality and behavioral anomalies of choice in credit markets

In: Research Handbook on Behavioral Law and Economics

Author

Listed:
  • Marieke Bos
  • Susan Payne Carter
  • Paige Marta Skiba

Abstract

An emerging literature explores how people choose between and use forms of consumer credit. In their chapter, Bos, Carter, and Skiba reflect on the existing literature that analyzes the choice between traditional forms of credit and non-traditional forms of credit such as pawnshop loans and payday loans. The authors add to this literature by introducing new data on observed choices of customers switching to pawnshop loans when payday loans are not available. They bring together these facts to discuss the behavioral economics of choice across these credit markets. They outline the relevant behavioral economics theory, which they hope will inform regulators’ choices in governing alterative credit markets.

Suggested Citation

  • Marieke Bos & Susan Payne Carter & Paige Marta Skiba, 2018. "Balancing act: new evidence and a discussion of the theory on the rationality and behavioral anomalies of choice in credit markets," Chapters, in: Joshua C. Teitelbaum & Kathryn Zeiler (ed.), Research Handbook on Behavioral Law and Economics, chapter 4, pages 101-121, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:14176_4
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    Cited by:

    1. Marieke Bos & Chloé Le Coq & Peter van Santen, 2022. "Scarcity and consumers’ credit choices," Theory and Decision, Springer, vol. 92(1), pages 105-139, February.

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    Keywords

    Economics and Finance; Law - Academic;

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