Robo-Advice: Transforming Households into Rational Economic Agents
Francesco D'Acunto () and
Alberto G. Rossi ()
Additional contact information
Francesco D'Acunto: Department of Finance, McDonough School of Business, Georgetown University, Washington, DC, USA
Alberto G. Rossi: Department of Finance, McDonough School of Business, Georgetown University, Washington, DC, USA
Annual Review of Financial Economics, 2023, vol. 15, issue 1, 543-563
Abstract:
Robo-advice uses big and open data to provide consumers with fully informed and rational-expectation benchmarks in all realms of household finance, including consumption, saving, investment, and debt management choices. It also minimizes the monetary, cognitive, and psychological costs that households face in economic transactions. We review recent research on the features and effects of robo-advice on individual and aggregate economic outcomes through the lens of its differences from traditional human advice. We discuss the distributional implications of robo-advice, its potential role in increasing the effectiveness of economic policies, the role of providers’ incentives, and several questions that are still wide open for researchers in finance, economics, social psychology, and related fields.
Keywords: FinTech; household finance; behavioral finance; consumption; debt; investments (search for similar items in EconPapers)
JEL-codes: D14 D91 G51 G53 O31 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (7)
Downloads: (external link)
https://doi.org/10.1146/annurev-financial-110921-013217
Full text downloads are only available to subscribers. Visit the abstract page for more information.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:anr:refeco:v:15:y:2023:p:543-563
Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce
DOI: 10.1146/annurev-financial-110921-013217
Access Statistics for this article
More articles in Annual Review of Financial Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().