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Displaying results 1 to 4 of 4.

  1. Measuring time inconsistency using financial transaction data
    Author: Gill, Andrej; Hett, Florian; Tischer, Johannes
    Published: [2018]
    Publisher:  SAFE, Sustainable Architecture for Finance in Europe, Frankfurt

    Improving financial conditions of individuals requires an understanding of the mechanisms through which bad financial decision-making leads to worse financial outcomes. From a theoretical point of view, a key candidate inducing mistakes in financial... more

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 430 (55)
    Inter-library loan:
    No inter-library loan

     

    Improving financial conditions of individuals requires an understanding of the mechanisms through which bad financial decision-making leads to worse financial outcomes. From a theoretical point of view, a key candidate inducing mistakes in financial decision-making are so called present-biased preferences, which are one of the cornerstones of behavioral economics. According to theory, present-biased households should behave systematically different when it comes to consumption and saving decisions, as they should be more prone to spending too much and saving too little. In this policy letter we show how high frequency financial transaction data available in digitized form allows to precisely categorize individual financial-decision making to be present-biased or not. Using this categorization, we find that one out of five individuals in our sample exhibits present-bias and that this present-biased behavior is associated with a stronger use of overdrafts. As overdrafts represent a particularly expensive way of short-term borrowing, their systematic use can be interpreted as a measure of suboptimal financial-decision making. Overall, our results indicate that the combination of economic theory and Big Data is able to generate valuable insights with applications for policy makers and businesses alike.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/181875
    Series: SAFE white paper ; no. 55 (July 2018)
    Subjects: financial decision-making; financial transaction data; present bias; time inconsistency
    Scope: 1 Online-Ressource (circa 8 Seiten), Illustrationen
  2. The Markov switching ACD model
    Author: Hujer, Reinhard; Vuletić, Sandra; Kokot, Stefan
    Published: 2002
    Publisher:  Univ., Fachbereich Wirtschaftswiss., Frankfurt am Main

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  3. Bias-free nonparametric estimation of intra-day trade activity measures
    Author: Grammig, Joachim; Hujer, Reinhard; Kokot, Stefan
    Published: 2000
    Publisher:  Univ.-Bibliothek Frankfurt am Main, Frankfurt am Main

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  4. The Markov switching ACD model
    Author: Hujer, Reinhard; Vuletić, Sandra; Kokot, Stefan
    Published: 2002
    Publisher:  Univ.-Bibliothek Frankfurt am Main, Frankfurt am Main

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