The persistence of cognitive biases in financial decisions across economic groups

TY - JOUR

T1 - The persistence of cognitive biases in financial decisions across economic groups

AU - Ruggeri, Kai

AU - Ashcroft-Jones, Sarah

AU - Abate Romero Landini, Giampaolo

AU - Al-Zahli, Narjes

AU - Alexander, Natalia

AU - Andersen, Mathias Houe

AU - Bibilouri, Katherine

AU - Busch, Katharina

AU - Cafarelli, Valentina

AU - Chen, Jennifer

AU - Doubravová, Barbora

AU - Dugué, Tatianna

AU - Durrani, Aleena Asfa

AU - Dutra, Nicholas

AU - Garcia-Garzon, Eduardo

AU - Gomes, Christian

AU - Gracheva, Aleksandra

AU - Grilc, Neža

AU - Gürol, Deniz Mısra

AU - Heidenry, Zoe

AU - Hu, Clara

AU - Krasner, Rachel

AU - Levin, Romy

AU - Li, Justine

AU - Messenger, Ashleigh Marie Elizabeth

AU - Miralem, Melika

AU - Nilsson, Fredrik

AU - Oberschulte, Julia Marie

AU - Obi, Takashi

AU - Pan, Anastasia

AU - Park, Sun Young

AU - Pascu, Daria Stefania

AU - Pelica, Sofia

AU - Pyrkowski, Maksymilian

AU - Rabanal, Katherinne

AU - Ranc, Pika

AU - Mekiš Recek, Žiga

AU - Symeonidou, Alexandra

AU - Tutuska, Olivia Symone

AU - Vdovic, Milica

AU - Yuan, Qihang

AU - Stock, Friederike

N1 - © 2023. The Author(s).

PY - 2023/6/26

Y1 - 2023/6/26

N2 - While economic inequality continues to rise within countries, efforts to address it have been largely ineffective, particularly those involving behavioral approaches. It is often implied but not tested that choice patterns among low-income individuals may be a factor impeding behavioral interventions aimed at improving upward economic mobility. To test this, we assessed rates of ten cognitive biases across nearly 5000 participants from 27 countries. Our analyses were primarily focused on 1458 individuals that were either low-income adults or individuals who grew up in disadvantaged households but had above-average financial well-being as adults, known as positive deviants. Using discrete and complex models, we find evidence of no differences within or between groups or countries. We therefore conclude that choices impeded by cognitive biases alone cannot explain why some individuals do not experience upward economic mobility. Policies must combine both behavioral and structural interventions to improve financial well-being across populations.

AB - While economic inequality continues to rise within countries, efforts to address it have been largely ineffective, particularly those involving behavioral approaches. It is often implied but not tested that choice patterns among low-income individuals may be a factor impeding behavioral interventions aimed at improving upward economic mobility. To test this, we assessed rates of ten cognitive biases across nearly 5000 participants from 27 countries. Our analyses were primarily focused on 1458 individuals that were either low-income adults or individuals who grew up in disadvantaged households but had above-average financial well-being as adults, known as positive deviants. Using discrete and complex models, we find evidence of no differences within or between groups or countries. We therefore conclude that choices impeded by cognitive biases alone cannot explain why some individuals do not experience upward economic mobility. Policies must combine both behavioral and structural interventions to improve financial well-being across populations.

KW - Adult

KW - Humans

KW - Poverty

KW - Behavior Therapy

KW - Vulnerable Populations

KW - Cognition

KW - Bias

U2 - 10.1038/s41598-023-36339-2

DO - 10.1038/s41598-023-36339-2

M3 - SCORING: Journal article

C2 - 37365245

VL - 13

SP - 10329

JO - SCI REP-UK

JF - SCI REP-UK

SN - 2045-2322

IS - 1

ER -