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Behavioral Economics and Marketing in Aid of Decision Making Among the Poor

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Author Info

  • Mullainathan, Sendhil
  • Bertrand, Marianne
  • Shafir, Eldar

Abstract

This article considers several aspects of the economic decision making of the poor from the perspective of behavioral economics, and it focuses on potential contributions from marketing. Among other things, the authors consider some relevant facets of the social and institutional environments in which the poor interact, and they review some behavioral patterns that are likely to arise in these contexts. A behaviorally more informed perspective can help make sense of what might otherwise be considered “puzzles†in the economic comportment of the poor. A behavioral analysis suggests that substantial welfare changes could result from relatively minor policy interventions, and insightful marketing may provide much needed help in the design of such interventions.

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File URL: http://dash.harvard.edu/bitstream/handle/1/2962609/behavioral%20economics%20and%20marketing.pdf
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Bibliographic Info

Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 2962609.

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Date of creation: 2006
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Publication status: Published in Journal of Public Policy and Marketing
Handle: RePEc:hrv:faseco:2962609

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Web page: http://www.economics.harvard.edu/
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References

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  1. Marianne Bertrand & Dean Karlin & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," NBER Working Papers 11892, National Bureau of Economic Research, Inc.
  2. Esther Duflo & William Gale & Jeffrey Liebman & Peter Orszag & Emmanuel Saez, 2005. "Saving incentives for low- and middle-income families: Evidence from a field experiment with h&r block," Framed Field Experiments 00234, The Field Experiments Website.
  3. Richard Thaler, 1985. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 4(3), pages 199-214.
  4. Marianne Bertrand & Sendhil Mullainathan & Eldar Shafir, 2004. "A Behavioral-Economics View of Poverty," American Economic Review, American Economic Association, vol. 94(2), pages 419-423, May.
  5. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
  6. Ausubel, Lawrence M, 1991. "The Failure of Competition in the Credit Card Market," American Economic Review, American Economic Association, vol. 81(1), pages 50-81, March.
  7. Samuelson, William & Zeckhauser, Richard, 1988. " Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
  8. Marianne Bertrand & Sendhil Mullainathan & Dean Karlan & Eldar Shafir & Jonathan Zinman, 2009. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," Working Papers 968, Economic Growth Center, Yale University.
  9. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  10. Natalie Ross Adkins & Julie L. Ozanne, 2005. "The Low Literate Consumer," Journal of Consumer Research, University of Chicago Press, vol. 32(1), pages 93-105, 06.
  11. Richard H. Thaler & Shlomo Benartzi, 2004. "Save More Tomorrow (TM): Using Behavioral Economics to Increase Employee Saving," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S164-S187, February.
  12. Marianne Bertrand & Dean Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2006. "What's psychology worth? A field experiment in the consumer credit market," Natural Field Experiments 00217, The Field Experiments Website.
  13. Knetsch, Jack L, 1989. "The Endowment Effect and Evidence of Nonreversible Indifference Curves," American Economic Review, American Economic Association, vol. 79(5), pages 1277-84, December.
  14. Richard Thaler & Shlomo Benartzi, 2004. "Save more tomorrow: Using behavioral economics to increase employee saving," Natural Field Experiments 00337, The Field Experiments Website.
  15. Sunstein, Cass R. & Thaler, Richard H., 2003. "Libertarian Paternalism Is Not An Oxymoron," Working paper 320, Regulation2point0.
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Citations

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Cited by:
  1. Koch, Alexander K. & Nafziger, Julia, 2011. "Goals and Psychological Accounting," IZA Discussion Papers 5802, Institute for the Study of Labor (IZA).
  2. Lucy Delgadillo, 2013. "An Assessment of Consumer Protection and Consumer Empowerment in Costa Rica," Journal of Consumer Policy, Springer, vol. 36(1), pages 59-86, March.
  3. Huysentruyt, Marieke & Lefevere, Eva & Menon, Carlo, 2013. "Dynamics of retail-bank branching in Antwerp (Belgium) 1991–2006: Evidence from micro-geographic data," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 291-304.
  4. Anderson, C. Leigh & Cullen, Alison & Stamoulis, Kostas, 2008. "Preference variability along the policy chain in Vietnam," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1729-1745, October.
  5. Bejenariu, Simona & Mitrut, Andreea, 2014. "Bridging the Gap for Roma Women: The Effects of a Health Mediation Program on Roma Prenatal Care and Child Health," Working Papers in Economics 590, University of Gothenburg, Department of Economics.
  6. Gennetian, Lisa A. & Castells, Nina & Morris, Pamela A., 2010. "Meeting the basic needs of children: Does income matter?," Children and Youth Services Review, Elsevier, vol. 32(9), pages 1138-1148, September.
  7. Gau, Roland & Jae, Haeran & Viswanathan, Madhubalan, 2012. "Studying low-literate consumers through experimental methods: Implications for subsistence marketplaces," Journal of Business Research, Elsevier, vol. 65(12), pages 1683-1691.
  8. Punj, Girish, 2012. "Income effects on relative importance of two online purchase goals: Saving time versus saving money?," Journal of Business Research, Elsevier, vol. 65(5), pages 634-640.
  9. Ramani, Shyama & SadreGhazi, Shuan & Duysters, Geert, 2010. "On the Delivery of Pro-Poor Innovations: Managerial Lessons from Sanitation Activists in India," MERIT Working Papers 018, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  10. Blocker, Christopher P. & Ruth, Julie A. & Sridharan, Srinivas & Beckwith, Colin & Ekici, Ahmet & Goudie-Hutton, Martina & Rosa, José Antonio & Saatcioglu, Bige & Talukdar, Debabrata & Trujillo, Carl, 2013. "Understanding poverty and promoting poverty alleviation through transformative consumer research," Journal of Business Research, Elsevier, vol. 66(8), pages 1195-1202.
  11. Christopher P. Barrington-Leigh & John F. Helliwell, 2008. "Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups," NBER Working Papers 14593, National Bureau of Economic Research, Inc.
  12. Karlan, Dean & Morduch, Jonathan, 2010. "Access to Finance," Handbook of Development Economics, Elsevier.
  13. Rossin-Slater, Maya, 2013. "WIC in your neighborhood: New evidence on the impacts of geographic access to clinics," Journal of Public Economics, Elsevier, vol. 102(C), pages 51-69.

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