IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v21y2000i3-4p133-144.html
   My bibliography  Save this article

Inappropriate sales in the financial services industry: the limits of the rational calculus?

Author

Listed:
  • David Leece

    (Department of Management, University of Keele, Staffordshire, UK)

Abstract

The paper explores the notion of 'misselling' in the context of financial services. 'Misselling' is treated as a special case of error in the classification of a discrete dependent variable. A simulation study is conducted using the sale of mortgage debt to outright owners of property as an example of how inappropriate sales manifest themselves. This is followed by the actual case of endowment mortgage sales. The results and discussion suggests that 'misselling' can be viewed (i) in the context of empirical regularities and a rationalizable view of the data and|or (ii) as a non rationalizable situation where the 'misselling' becomes 'pathological'. The paper highlights the need for a behavioural perspective, in addition to a more conventional economic treatment of the 'misselling' phenomenon. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • David Leece, 2000. "Inappropriate sales in the financial services industry: the limits of the rational calculus?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(3-4), pages 133-144.
  • Handle: RePEc:wly:mgtdec:v:21:y:2000:i:3-4:p:133-144
    DOI: 10.1002/mde.978
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.978
    File Function: Link to full text; subscription required
    Download Restriction: no

    References listed on IDEAS

    as
    1. Borgers, Tilman, 1996. "On the Relevance of Learning and Evolution to Economic Theory," Economic Journal, Royal Economic Society, vol. 106(438), pages 1374-1385, September.
    2. Foxall, Gordon R., 1999. "The marketing firm," Journal of Economic Psychology, Elsevier, vol. 20(2), pages 207-234, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:21:y:2000:i:3-4:p:133-144. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.