Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233488 
Year of Publication: 
2020
Series/Report no.: 
Discussion Paper No. 264
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
This paper examines the effect of reduced self-control on debt-taking in a laboratory experiment. We manipulate self-control using an ego depletion task and show that it is effective. Following the ego depletion task, participants can anonymously buy hot drinks on credit. We find no significant average effects, but find that treated individuals that have low financial literacy are more likely to buy drinks. We complement our experimental analysis with survey evidence that suggests that people with low self-control have more problems with the repayment of consumption debt, but this relationship is, in line with the experimental results, weaker for individuals with high financial literacy.
Subjects: 
Debt
Consumption
Borrowing
Self-Control
Ego depletion
JEL: 
D14
G51
C91
Document Type: 
Working Paper

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