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Are Information Disclosure Mandates Effective? Evidence from the Credit Card Market

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Listed:
  • Alan Elizondo
  • Enrique Seira

Abstract

Consumer protection in financial markets in the form of information disclosure is high on governments agendas, despite the fact that the empirical evidence on its effectiveness is scarce. To measure the impact of Truth-in-Lending-Act-type disclosures on default and indebtedness, as well as of debiasing warning messages and social comparison information, we implement a randomized control trial in the credit card market for a large population of indebted cardholders. We find that providing salient interest rate disclosures has no effect, while social comparisons and debiasing messages have only a odest effect. Other types of disclosures discussed in the paper could have larger effects.

Suggested Citation

  • Alan Elizondo & Enrique Seira, 2014. "Are Information Disclosure Mandates Effective? Evidence from the Credit Card Market," Working Papers 2014-18, Banco de México.
  • Handle: RePEc:bdm:wpaper:2014-18
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7B8EF5674F-2632-DFD0-5EAA-23D80EE49E43%7D.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ulrike Malmendier, 2016. "The Bidder's Curse: Reply," American Economic Review, American Economic Association, vol. 106(4), pages 1195-1213, April.

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    More about this item

    Keywords

    Credit cards; information disclosure; truth in lending; Mexico.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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