Data Study From uncertainty to skilled decision

This study examines financially skilled decision-making through the lens of ecologically rational heuristics, focusing on how individuals with different credit card payment patterns respond to variations in product price and risk communication. An experimental design compared three groups: (1) full-balance payers, (2) minimum-amount payers, and (3) individuals with a history of non-compliance with minimum payments. Participants completed a discrete choice task involving card pairs that varied by product price (High, Moderate, Low) and risk communication type (Balanced vs. Unbalanced information). For each trial, participants selected a card, indicated their product preference, and specified the number of credit card installments they would use. Results from logistic regression and mean difference analyses revealed that cards with balanced risk communication were significantly more likely to be chosen across all groups. This preference for balanced information was consistent regardless of participants' payment patterns. Additionally, when presented with balanced information, participants chose fewer installments, suggesting that balanced risk communication promotes more adaptive financial decisions. These findings highlight the critical role of balanced risk communication in fostering skilled financial decision-making, even among individuals with varying levels of financial knowledge. The study underscores the importance of requiring financial companies to provide balanced information to consumers. By ensuring that risk communication is balanced, financial institutions can empower consumers to make more informed and adaptive decisions, regardless of their payment history or financial expertise. These results have significant implications for regulatory measures aimed at enhancing consumer protection and promoting financial well-being.