High credit card debt default has been symptomatic for the U.S. and other countries in the last decades. Different explanations for this situation exist in the literature. One explanation is overconfidence, which has become a key concept in behavioural economics for explaining anomalies in financial markets such excessive trading volume. There is also the idea that overconfidence is to blame for high credit card debt. In this paper, an agent-based model is presented that examines the effects of overconfidence on credit card usage. Overconfidence is used here to explain why people who never intend to borrow on their credit card(s) do so anyway.The model contains consumption, two means of payment (credit card and cash), and a distortion to agents' income expectations via overconfidence. It was found that overconfidence leads to more “accidental” borrowing and higher interest rates.
from #AlexandrosSfakianakis via Alexandros G.Sfakianakis on Inoreader http://ift.tt/1t0KfeE
via IFTTT
Εγγραφή σε:
Σχόλια ανάρτησης (Atom)
Δημοφιλείς αναρτήσεις
-
Publication date: Available online 4 January 2018 Source: European Journal of Radiology Author(s): Peiyao Zhang, Jing Wang, Qin Xu, Zhen...
-
Related Articles Anatomic parameters of the sacral lamina for osteosynthesis in transverse sacral fractures. Surg Radiol Anat....
-
Medicine by Alexandros G. Sfakianakis,Anapafseos 5... Medicine by Alexandros G. Sfakianakis,Anapafseos 5... Heralding change: The evolution ...
-
Background Hyperthyroidism is associated with increased thrombotic risk. As contact system activation through formation of neutrophil extrac...
-
BACKGROUND AND PURPOSE: Dengue is a common arboviral disease, which uncommonly involves the brain. There has been a recent surge in dengu...
-
Abstract Purpose Investigate in patients with metastatic and/or irresectable colorectal cancer treated with systemic treatment with cape...
-
Publication date: January 2017 Source: The Journal of Emergency Medicine, Volume 52, Issue 1 Author(s): Patricia Michelle Troxell Klingen...
-
In rural Kenya, traditional and faith healers provide an alternative pathway to health care, including mental health care. However, not much...
-
2016-12-10T02-17-59Z Source: Indo American Journal of Pharmaceutical Research R. Santosh Kumar*, T. Naga Satya Yagnesh. Solid dispersio...
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου