Journal of Marketing Research Special Issue on Consumer Finance

The recent financial crisis, brought about in part by high levels of consumer debt and mortgage delinquency, has provided a particularly dramatic example of the commonplace fact that consumer financial decision-making is often flawed. Although there are laws in place requiring full disclosure of information regarding financial products, it is apparent that disclosure is frequently not enough to help consumers make sound decisions. Consumers may be confused by the length and complexity of a contract. They may focus on only part of the agreement or simply misjudge their own ability to repay a loan. If regulation of retail financial products is to be successful in improving consumer outcomes, it may need to take account of which kinds of errors consumers are prone to make.

In November 2009 the Russell Sage Foundation, along with the Alfred P. Sloan Foundation, initiated a working group on consumer finance. The purpose of this group is to advance behavioral economic research on the regulation of retail financial markets, and, specifically, to explore how the regulation of consumer finance might be improved by taking into account the results of behavioral research. As part of this initiative, Russell Sage and Sloan will jointly sponsor a special interdisciplinary issue of the Journal of Marketing Research (JMR) on consumer finance. JMR is the top journal representing marketing using approaches from both economics and psychology. This will be the first special issue that JMR has done in several decades, and the issue will help publicize the work being undertaken by the working group members and make the results more widely available.

The editorial board for the special issue comprises John Lynch (University of Colorado, Boulder) and Shlomo Benartzi (University of California, Los Angeles), both of whom worked with JMR to develop the idea for the special issue. They will be joined by Stefano DellaVigna (University of California, Berkeley) and George Loewenstein (Carnegie Mellon University). A call for proposals has been issued asking scholars from psychology, consumer research, behavioral finance, and behavioral economics to submit papers that can inform our understanding of how consumers make decisions and what innovations in public policy, law, business, and consumer education might help consumers to make better decisions. The editorial board expects this call for papers to produce a “significant cross-fertilization across fields” which should lead to papers that have a substantial impact on current thinking in consumer finance.