Behavioral biases, financial literacy and competitiveness in credit markets (A03)

• Subject Area: Economic Policy, Applied Economics
• Term: from 2017 to 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 280092119

Competence in financial decision making is becoming increasingly important. However, most individuals make suboptimal financial decisions. Project examines the hypothesis that these poor decisions may be (partially) caused by behavioral distortions and we explore how these interact with a person¿s level of financial literacy. In particular, the project will test the impact of (i) biased return expectations, (ii) self-control problems and (iii) social comparisons on too much and too expensive borrowing. In a possible second phase it is planned to develop and test in a randomized design a financial training which explicitly considers behavioral distortions.

• DFG Programme: CRC/Transregios
• Subproject of: TRR 190: Rationality and Competition: The Economic Performance of Individuals and Firms
• Applicant Institution: Ludwig-Maximilians-Universität München
• Project Head: Professor Dr. Lukas Menkhoff