Applying Behavioural Economics to Promote Financial Literate Behaviour: An Overview of Studies

This paper presents an overview of the possibilities for the use of behavioural economics to promote financially literate behaviour. Two key areas are distinguished: affecting human behaviour (through financial literacy education, the development of financial culture, increasing attentiveness and providing tools to combat cognitive biases) and affecting the decision-making environment (through nudging, regulation and modifying the information environment). The features, prospects and limitations of each approach are discussed with due regard to international and Russian experience. The paper emphasises the importance of customised approaches to different socio-demographic groups as well as experimental testing of the effectiveness of various behavioural tools before mass adoption, and it discusses the key ethical risks and challenges associated with using behavioural economics to promote financially literate behaviour.