Carnegie Mellon University

Decision Making Styles and Consumer Financial Well-Being

The way consumers approach financial choices shapes their financial wellbeing. They can approach these decisions deliberately or intuitively, and with a focus on the future or the present. Research has shown that individuals who adopt a deliberate decision making style and focus on the future, as opposed to being intuitive and present - focused, tend to make more optimal decisions in lab experiments. Building on this research, we aim to develop better measures of decision making styles and see whether these can predict the quality of consumers’ real - life financial choices and their resulting financial wellbeing. In particular, we aim to combine the collective ‘wisdom’ of several different decision making style scales in order to produce a single, optimized measurement tool that efficiently and accurately captures the core features of consumers’ decision making styles. This scale, in turn, will help us categorize consumers according to the core psychological dimensions of financial decision making. Our ultimate goal will be to see how well their responses to this optimized scale predict their preferences concerning financial products, their investment choices, and their tendency to accumulate asset vs. debt.

pradeep ravikumar

Chris Olivola

Project Lead