Please use this identifier to cite or link to this item:
https://hdl.handle.net/10316/92315
Title: | When more is less in financial decision‑making: financial literacy magnifies framing effects | Authors: | Costa, Vânia Moreira Teixeira, Nuno A. de Sá Santos, Ana Cordeiro Santos, Eduardo |
Issue Date: | 19-Jun-2020 | Publisher: | Springer | Project: | SFRH/BD/99484/2014 | Serial title, monograph or event: | Psychological Research | Abstract: | In recent years, the financial world has become more complex and intricate. In this context, numeracy and, particularly, financial literacy, are seen as paramount in providing consumers with the knowledge and confidence required to take part in financial markets. Despite some indicative empirical findings, it is still to be ascertained how the two competences differentially contribute to the quality of decision-making in financial contexts. Furthermore, it is still unknown to what degree financial literacy and numeracy, taken as relevant mind-ware for financial decision-making, are effective in guarding against well-documented biases such as loss aversion and framing effects. This study aims to clarify these issues by employing an experimental task, conceived as an approximation to real-world decision-making involving the sale of shares. Our results suggest that numeracy and financial literacy affect decision-making differently in a pattern that, in part, runs counter to conventional economic theory. The data indicate that numeracy promotes a pattern of choices closer to economic rationality, while financial literacy can prove counterproductive and may amplify cognitive biases, namely framing effects and loss aversion. The outcomes are interpreted in light of dual-process theories, and the political implications discussed. | URI: | https://hdl.handle.net/10316/92315 | ISSN: | 0340-0727 1430-2772 |
DOI: | 10.1007/s00426-020-01372-7 | Rights: | embargoedAccess |
Appears in Collections: | I&D CES - Artigos em Revistas Internacionais |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
When more is less in financial decision-making.pdf | 1.02 MB | Adobe PDF | View/Open |
SCOPUSTM
Citations
3
checked on Nov 9, 2022
WEB OF SCIENCETM
Citations
2
checked on May 2, 2023
Page view(s)
281
checked on Oct 9, 2024
Download(s)
828
checked on Oct 9, 2024
Google ScholarTM
Check
Altmetric
Altmetric
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.