MCCHE Precision Convergence Webinar Series with Dilip Soman
Do mandated financial disclosures help consumer make better choices?
By Dilip Soman
Canada Research Chair in Behavioural Science and Economics at the Rotman School of Management, University of Toronto
With High-Level Panel of Leaders in Science, Technology, On-the-Ground Action, and Policy
Regulators operate on the assumption that making select financial terms on loan products easier to access and salient to process helps borrowers make better choices. In this talk, I propose that improved access is a double-edged sword. In a first set of laboratory choice studies, I will present results that examine whether the provision of credit card terms and conditions in an easy- to-read table (the so called Schumer boxes) and making the borrowing costs salient can help a subset of consumers. However, for people who use the card only for convenience, the salience of borrowing costs might actually backfire. In a second set of incentive-compatible studies using a realistic replica banking website, we tasked participants with finding the best credit card onsite. We randomly varied whether the costs of borrowing was relevant to their financial situation, as well as the accessibility of this information. Improved access led to better choices when costs were relevant and worse ones otherwise. Clickstream data show the effect arises because participants are exposed to more cost information with easier access, and that the effect is exacerbated with higher financial literacy.
About the speaker
Dilip Soman is a Canada Research Chair in Behavioural Science and Economics at the Rotman School of Management, University of Toronto. He has degrees in behavioral science, marketing, and engineering, and is interested in the applications of behavioral science in organizations, and for welfare and policy. He is the co-author of Managing Customer Value (2022), author of The Last Mile (2015) and co-editor of The Behaviorally Informed Organization (2021) and Behavioral Science in the Wild (2022). He has taught in the U.S.A, Hong Kong and Canada, and has worked with several corporations, governments and start-ups. His non-academic interests include procrastination, cricket, travel, and taking weekends seriously.
About the series
The Precision Convergence series is launched to catalyze unique synergy between, on the one hand, novel partnerships across sciences, sectors and jurisdictions around targeted domains of real-world solutions, and on the other hand, a next generation convergence of AI with advanced research computing and other data and digital architectures such as PSC’s Bridges-2, and supporting data sharing frameworks such as HuBMAP, informing in a real time as possible the design, deployment and monitoring of solutions for adaptive real-world behaviour and context.
The Precision Convergence Webinar Series is co-hosted by The McGill Centre for the Convergence of Health and Economics (MCCHE) at McGill University and The Pittsburgh Supercomputing Center, a joint computational research centre between Carnegie Mellon University and the University of Pittsburgh.