Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/198893
Authors: 
D'Acunto, Francesco
Rossi, Alberto G.
Weber, Michael
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper 7533
Abstract: 
We document five effects of providing individuals with crowdsourced spending information about their peers (individuals with similar characteristics) through a FinTech app. First, users who spend more than their peers reduce their spending significantly, whereas users who spend less keep constant or increase their spending. Second, users’ distance from their peers’ spend-ing affects the reaction monotonically in both directions. Third, users’ reaction is asymmetric - spending cuts are three times as large as increases. Fourth, lower-income users react more than others. Fifth, discretionary spending drives the reaction in both directions and especially cash withdrawals, which are commonly used for incidental expenses and anonymous transactions. We argue Bayesian updating, peer pressure, or the fact that bad news looms more than (equally-sized) good news cannot alone explain all these facts.
Subjects: 
FinTech
learning
beliefs and expectations
peer pressure
financial decision-making
saving
consumer finance
JEL: 
D12
D14
D91
E22
G41
Document Type: 
Working Paper

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