Crowdsourcing financial information to change spending behavior

Francesco D'Acunto, Alberto G. Rossi, Michael Weber and Michael Weber
Authors registered in the RePEc Author Service: Michael Weber

No 7533, CESifo Working Paper Series from CESifo

Abstract: We document five effects of providing individuals with crowdsourced spending information about their peers (individuals with similar characteristics) through a FinTech app. First, users who spend more than their peers reduce their spending significantly, whereas users who spend less keep constant or increase their spending. Second, users’ distance from their peers’ spend-ing affects the reaction monotonically in both directions. Third, users’ reaction is asymmetric - spending cuts are three times as large as increases. Fourth, lower-income users react more than others. Fifth, discretionary spending drives the reaction in both directions and especially cash withdrawals, which are commonly used for incidental expenses and anonymous transactions. We argue Bayesian updating, peer pressure, or the fact that bad news looms more than (equally-sized) good news cannot alone explain all these facts.

Keywords: FinTech; learning; beliefs and expectations; peer pressure; financial decision-making; saving; consumer finance (search for similar items in EconPapers)
JEL-codes: D12 D14 D91 E22 G41 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-exp, nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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