BEHAVE | A behavioral approach to consumer credit decision-making

Research Group

Governance, Economy and Citizenry

Website: n.a.


Taking as starting point the results of the behavioral sciences on heuristics and biases, this project aims to investigate consumer credit decision-making, marketing strategies that exacerbate that behavior, and assess the extent to which consumer protection policy adequately takes into account heuristics people use when making complex decisions, human cognitive limitations and self- control problems. People systematically deviate from the neoclassical economics model of human action that assumes complete information, unlimited cognitive abilities, and full self-control. The high debt rates of consumers in developed societies can be to some extent explained in terms of individuals’ failure in making sensible credit decisions due to non-transparent information which is difficult to process and to the temptation of immediate gratification, which is too salient as compared to the delayed costs of hasty decisions. The four main goals of this project are:

1) To investigate the heuristics and the cognitive biases that affect consumer credit decision-making, when accessing and appraising information and choosing.

2) To investigate the extent to which sellers’ marketing strategies manipulate heuristics and exploit consumer cognitive biases.

3) To investigate the extent to which consumer protection policy adequately addresses the identified biases and their exploitation by firms.

4) To recommend policy proposals that better address the complexity of consumer credit decision-making.

Period: 2011 - 2014

Funding Institution: FCT - Fundação para a Ciência e a Tecnologia | PTDC/PSI-PSO/114257/2009

Coordination: Ana Cristina Santos (CES - U.Coimbra)


External Team: Catarina Frade; Cláudia Lopes; Fernanda Jesus; José Castro Caldas e José Miguel Pereira


International Conference | Households in the Financial Crisis: Consumer credit and Policy

17 January de 2014

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Updated: 31/01/2018

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