What Shapes Consumer Choice and Financial Products? A Review

Posted: 3 Jan 2018

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Souphala Chomsisengphet

Government of the United States of America - Office of the Comptroller of the Currency (OCC)

Cheryl Lim

EDHEC Business School

Multiple version iconThere are 2 versions of this paper

Date Written: November 2017

Abstract

Central to the field of consumer finance is that consumers make financial decisions that do not always coincide with the financial decisions ideally depicted in optimal economic models. In this review, we discuss developments in the field of household finance, focusing on how consumers make suboptimal financial decisions across different types of settings and factors that affect their decisions. Rather than conducting a comprehensive survey, we focus specifically on consumer choice in the context of research on credit card borrowing, housing and mortgage debts, investment and savings decisions, and spending and consumption. We also discuss financial product design and marketing, as well as the regulatory landscape of lenders of consumer financial products. We present five future research directions and considerations for researchers and policymakers.

Suggested Citation

Agarwal, Sumit and Chomsisengphet, Souphala and Lim, Cheryl, What Shapes Consumer Choice and Financial Products? A Review (November 2017). Annual Review of Financial Economics, Vol. 9, pp. 127-146, 2017, Available at SSRN: https://ssrn.com/abstract=3095980 or http://dx.doi.org/10.1146/annurev-financial-110716-032417

Sumit Agarwal (Contact Author)

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Souphala Chomsisengphet

Government of the United States of America - Office of the Comptroller of the Currency (OCC) ( email )

400 7th Street SW
Washington, DC 20219
United States

Cheryl Lim

EDHEC Business School

58 rue du Port
Lille, 59046
France

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