Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/234986
Authors: 
Grohmann, Antonia
Hamdan, Jana S.
Year of Publication: 
2021
Series/Report no.: 
DIW Discussion Papers No. 1950
Abstract: 
This paper examines the effect of reduced self-control on impulsive borrowing 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 borrow impulsively. We complement our experimental analysis with survey evidence that suggests that people with low self-control have more problems with the repayment of consumer debt. 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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