You Can Crowdsource Better Spending Habits
Having insight into the consumption habits of others can help calibrate and moderate your own habits.
You Can Crowdsource Better Spending HabitsPaper Crowdsourcing Financial Information to Change Spending Behavior
Consumers might overestimate optimal spending if forming beliefs based on others' spending, because others' conspicuous consumption is more visible than the rest of their consumption. If true, information about others' overall spending should change beliefs and choice. For a test, we provide crowdsourced information about anonymous “peer groups" to users of a FinTech app. Users converge to peers, especially when peer groups are more informative. For identification, we compare similar users matched to different peers based on sharp thresholds. A randomized control trial on a non-selected population supports external validity. Our results inform the design of robo-advisors for spending.
- Authored by
- 2019
- Financial Inclusion
Read the Research in Chicago Booth Review