FRB Dallas Home » Community Development »Events »2010 »Consumer Decisionmaking: Insights from Behavioral Economics
 
 

Community Development Events

Consumer Decisionmaking: Insights from Behavioral Economics

April 29–30, 2010
Federal Reserve Bank of Dallas

Hosted by:
Federal Reserve Bank of Dallas

In Partnership with:
University of Texas at Dallas

The increased complexity of the financial markets has made it difficult for consumers to choose products that best serve their interests. This conference examined factors that guide consumers' decisionmaking process—such as immediate gratification, inertia or a lack of knowledge and understanding about the costs and benefits of financial services.

Leading scholars presented their research with particular focus on low- to moderate-income consumers. We had a dialogue among financial institutions, regulators and policymakers on how to develop better products, services and policies.

Agenda

Thursday, April 29
5:30 p.m.   Reception
6:15 p.m.   Welcome
6:30 p.m.   Dinner
    Animal Spirits and the EconomyPDF
George Akerlof
2001 Nobel Laureate in Economics
University of California, Berkeley
Session VideoFlash video

Friday, April 30
7:45 a.m.   Registration and Breakfast
8:30 a.m.   Welcome
    Alfreda B. Norman
Federal Reserve Bank of Dallas
8:40 a.m.   Behavioral Measures for Consumer Finance
    Moderator and Speaker
Behavioral Measures for Consumer FinancePDF
Catherine Eckel
University of Texas at Dallas
    Jeffrey Carpenter
Middlebury College
9:45 a.m.   Break
10 a.m.   Understanding Consumers' Behavior
    Understanding Consumers' BehaviorPDF
Rachel Croson
University of Texas at Dallas
    An Empirical Examination of Customer Experience with Rent-to-Own TransactionsPDF
Signe-Mary McKernan
The Urban Institute
    The First of the Month Effect: Consumer Behavior and Store ResponsesPDF
Ebonya Washington
Yale University
11:30 a.m.   Lunch
    Noon Luncheon Address
    Sendhil Mullainathan
Harvard University
Session VideoFlash video

1 p.m.   Financial Sophistication, Financial Education and Innovative Products
    Moderator and Speaker
Financial Literacy and Subprime Mortgage DelinquencyPDF
Stephan Meier
Columbia Business School
    That Was Easy: Why Simple MattersPDF
Brigitte Madrian
Harvard University
    Applying Behavioral Economics to Improve Financial Outcomes: The AutoSave ExperiencePDF
Alejandra Lopez-Fernandini
New America Foundation
2:15 p.m.   Behavioral Insights into Financial Regulation
    Moderator
Wenhua Di
Federal Reserve Bank of Dallas
    Economic Analysis of Consumer Information and Consumer Behavior in the Mortgage Market
Janis Pappalardo
Federal Trade Commission
    Decisions & Disclosures: Insights from Behavioral EconomicsPDF
Jeanne Hogarth
Federal Reserve Board
3:30 p.m.   Closing Remarks
    Animal Spirits, Financial Literacy, and the Housing CrisisPDF
Christopher Foote
Federal Reserve Bank of Boston
4:00 p.m.   Adjourn

Speakers

George Akerlof
Koshland Professor of Economics
University of California, Berkeley
Berkeley, CA

Akerlof is professor of economics at the University of California, Berkeley. In 2001, he was corecipient of the Nobel Memorial Prize in economics. The Nobel Committee cited Akerlof's 1970 paper, "The Market for Lemons," which described for the first time the role of asymmetric information in causing market perversity. Akerlof was also a pioneer in the application of sociology and psychology to the workings of the macroeconomy. He has served as senior economist at the President's Council of Economic Advisers; as past president, vice president and member of the executive committee of the American Economics Association; and as a member of the North American Council of the Econometric Society. From 1979 to 1981, he was Cassel Professor of Money and Banking at the London School of Economics. In 2009 he published Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism with Robert Shiller; and in 2010, he published Identity Economics: How Our Identities Shape Our Work, Wages and Well-Being with Rachel Kranton. Akerlof received his Ph.D. in economics from the Massachusetts Institute of Technology.

Jeffrey Carpenter
Associate Professor of Economics
Middlebury College
Middlebury, VT

Carpenter is an associate professor of economics at Middlebury College. His research interests include experimental and behavioral economics with applications to development, labor and public economics. Much of this research has recently focused on using field experiments to measure preferences (time, risk and social) and linking these preferences to important outcomes (productivity, turnover, volunteering and loan repayment). This research has been published (or is forthcoming) in the American Economic Review, Economic Journal, Journal of Public Economics, Industrial and Labor Relations Review and Games and Economic Behavior, among other journals. Carpenter received his Ph.D. from the University of Massachusetts.

Rachel Croson
Director, The Negotiations Center
Professor of Economics & Professor of Organizations, Strategy and International Management
University of Texas at Dallas
Richardson, TX

Croson joined the University of Texas at Dallas after 13 years at the Wharton School of the University of Pennsylvania. Her research uses experimental methods to explore how individuals make economic decisions. Croson teaches courses in negotiation, experimental and behavioral economics and behavioral finance. She is currently involved in a UTD research project in South and West Dallas, exploring financial decisionmaking by individuals at the low end of the income distribution. Croson received her Ph.D. in economics from Harvard University.

Wenhua Di
Senior Economist, Community Affairs Department
Federal Reserve Bank of Dallas
Dallas, TX

Di is a senior economist in the Community Affairs Department of the Federal Reserve Bank of Dallas and a clinical assistant professor of economics at the University of Texas at Dallas. Her current research interests include housing economics, program evaluation and consumer finances. Before joining the Dallas Fed, she was a visiting assistant professor at the University of Texas at Dallas. She also worked with the development and research group at the World Bank. Di earned a B.S. and M.S. in environmental sciences from Peking University in China and a Ph.D. in public policy from Harvard University.

Catherine Eckel
Ashbel Smith Professor of Economics
University of Texas at Dallas
Richardson, TX

Eckel is the Ashbel Smith Professor of Economics and director of the Center for Behavioral and Experimental Economic Science at the University of Texas at Dallas. Her research interests bridge economics, psychology and sociology. Using experimental methods in the lab and field, she has investigated differences in the behavior of women and men, gender- and race-based discrimination, charitable giving and attitudes toward risk. She is past president of the Southern Economic Association and coeditor of the Journal of Economic Behavior and Organization. Her research has been funded by the National Science Foundation and various private foundations, and she has published more than 50 journal articles. She codirects a teaching technology project promoting interactive learning by using wireless handheld computers, which earned her two university-level teaching awards. Before joining UT Dallas, she was professor of economics at Virginia Tech, where she directed the Lab for the Study of Human Thought and Action. She served as a program officer for the Economics Program at the National Science Foundation (1996–98). Eckel earned a Ph.D. in economics from the University of Virginia.

Christopher Foote
Senior Economist and Policy Advisor
Federal Reserve Bank of Boston
Boston, MA

Foote, a senior economist and policy advisor in the Research Department at the Federal Reserve Bank of Boston, currently serves as adviser to the Center for Behavioral Economics and Decisionmaking. Previously, Foote was an economics professor and director of undergraduate studies at Harvard University. He was senior staff economist and then chief economist with the Council of Economic Advisers. Before joining the Boston Fed in 2003, Foote served as an economic adviser to the Coalition Provisional Authority in Baghdad, Iraq, returning briefly to Iraq in January and February of 2004. Foote earned his undergraduate degree from the College of William and Mary and doctoral degree from the University of Michigan.

Jeanne Hogarth
Program Manager, Consumer Education and Research Section
Federal Reserve Board
Washington, D.C.

Hogarth is the manager for the Consumer Education and Research Section of the Division of Consumer and Community Affairs at the Federal Reserve Board. Prior to joining the Board in 1995, she spent seven years teaching high school in Ohio, a year on the extension faculty at the University of Illinois and 13 years on the consumer economics faculty at Cornell University. At Cornell, she oversaw community education programs about family financial management and consumer economics. At the Federal Reserve Board, she is responsible for research, outreach initiatives and consumer information materials related to consumer financial services. Her recent projects include initiatives on consumers' use of banking services, consumer protection strategies, the effectiveness of financial education efforts, and consumer testing for comprehension and usability of disclosure notices. She is the author of numerous scholarly research articles as well as consumer education resources on financial management. Both her research and her consumer education programs have received awards for their excellence. Hogarth received a B.S. in education from Bowling Green State University and an M.S. and Ph.D. in family and consumer economics from Ohio State University.

Alejandra Lopez-Fernandini
Senior Policy Analyst, Asset Building Program
New America Foundation
Washington, D.C.

As a senior policy analyst in the Asset Building Program of the New America Foundation, Lopez-Fernandini's primary responsibilities include managing the AutoSave pilot and conducting research and analysis on policies that address shorter-term savings and access to financial services. She has a background in antihunger, antipoverty and community development programs and policies. She has served as a Bill Emerson National Hunger Fellow and currently sits on the Congressional Hunger Center board of directors. While in graduate school, she focused on social policy and conducted empirical research to assess the wealth-building potential of various homeownership strategies in North Carolina. She holds a B.A. in anthropology from the University of Notre Dame and a master's of public policy from the Terry Sanford Institute of Public Policy at Duke University.

Brigitte Madrian
Aetna Professor of Public Policy and Corporate Management
John F. Kennedy School of Government
Harvard University
Cambridge, MA

Madrian is the Aetna Professor of Public Policy and Corporate Management at the Harvard Kennedy School and director of the social science program at the Radcliffe Institute for Advanced Study. She is also a research associate at the National Bureau of Economic Research and coeditor of the Journal of Human Resources. Her current research focuses on household saving and investment behavior. Her work in this area has impacted the design of employer-sponsored savings plans in the U.S. and has influenced pension reform legislation both in the U.S. and abroad. She has also examined the impact of health insurance on the job choice and retirement decisions of employees and the hiring decisions of firms. She has been a faculty member at the University of Pennsylvania Wharton School (2003–06), University of Chicago Graduate School of Business (1995–2003) and the Harvard University economics department (1993–95). She received the National Academy of Social Insurance Dissertation Prize in 1994 and the TIAA-CREF Paul A. Samuelson Award for Scholarly Research on Lifelong Financial Security in 2002. Madrian studied economics as an undergraduate at Brigham Young University and received her Ph.D. in economics from the Massachusetts Institute of Technology.

Signe-Mary McKernan
Senior Research Associate and Economist
The Urban Institute
Washington, D.C.

McKernan is an economist with over 15 years experience researching access to assets and credit for the poor and the impact of welfare programs on the poor. She recently published the book Asset Building and Low-Income Families with Michael Sherraden and is leading the Urban Institute's Opportunity and Ownership Project. Prior to joining the Urban Institute in 1999, she was lead economist on credit issues at the Federal Trade Commission. She has also been a visiting and adjunct professor at Georgetown University. McKernan has extensive experience using rigorous econometric methods and large national survey databases. Her research has been published in books, policy briefs, reports and journal articles and has been presented at over 50 professional conferences and seminars. Her current research on assets includes the ability of assets to cushion negative events, the role of individual development accounts in sustaining homeownership, mortgage loan closing costs and the alternative financial sector. In her poverty-related work, she is evaluating the effectiveness of social programs in alleviating poverty and material hardship over the past 20 years. She designed the survey instrument and analyzed primary data on the rent-to-own industry and coauthored two journal articles and an influential Federal Trade Commission report on this research. McKernan received her Ph.D. in economics from Brown University.

Stephan Meier
Assistant Professor
Columbia University
New York, NY

Meier is an assistant professor at Columbia University Graduate School of Business and a visiting scholar at the Center for Behavioral Economics and Decisionmaking at the Federal Reserve Bank of Boston. He was previously a senior economist at the Boston Fed and taught courses on strategic interactions and economic policy at Harvard University and the University of Zurich. Meier's research interest is behavioral strategy. He investigates the impact of psychology and economics on human decisionmaking and its implications for public policy and firms' strategy. Current research topics include how nonselfish behaviors affect organizations and the effect of borrowers' decisionmaking on financial institutions' strategy. His work has been published or is forthcoming in the American Economic Review and Management Science and has been profiled in The Economist, Wall Street Journal, Financial Times, New York Times, Los Angeles Times and Neue Z�¼rcher Zeitung. He holds a Ph.D. in economics from the University of Zurich.

Sendhil Mullainathan
Director of ideas42 and Professor of Economics
Harvard University
Cambridge, MA

Mullainathan is a professor of economics at Harvard University and director of ideas42, a center that uses insights about people from behavioral economics to create novel policies, interventions and products. He is also a research associate at the National Bureau of Economic Research, a founding member of the Poverty Action Lab and a board member of the Bureau for Research and Economic Analysis of Development. Before coming to Harvard in 2004, he spent six years on the faculty at MIT. He is a recipient of a MacArthur Foundation "genius grant." Mullainathan has published extensively in economic journals including the American Economic Review, Quarterly Journal of Economics and Journal of Political Economy. In addition to being a MacArthur Fellow, he is the recipient of numerous grants and fellowships, including those from the National Science Foundation, the Olin Foundation, the Sloan Foundation, and the Russell Sage Foundation. Mullainathan received his B.A. in computer science, mathematics and economics from Cornell University and his Ph.D. in economics from Harvard.

Jim Murdoch
Professor of Economics and Public Policy
University of Texas at Dallas
Richardson, TX

Murdoch is a professor of economics and public policy in the School of Economic, Political and Policy Sciences at the University of Texas at Dallas and a scholar-in-residence at the Federal Reserve Bank of Dallas. From October 2001 through June 2005, Murdoch was the dean of the School of Social Sciences at UTD. Before coming to UTD, Murdoch held teaching and administrative positions at the University of Louisiana at Monroe and Auburn University at Montgomery. He has authored or coauthored numerous scholarly journal articles in the areas of environmental economics, public economics, housing and defense economics in such journals as Quarterly Journal of Economics, Review of Economics and Statistics, Economica, Economic Inquiry, Land Economics, Journal of Public Economics, Journal of Conflict Resolution and Journal of Environmental Economics and Management. Murdoch's research reflects an applied econometric approach with some emphasis on policy analysis and prescription. His current research concerns how changes in neighborhood conditions impact human welfare. Murdoch graduated from Grand Valley State College and received his Ph.D. in economics from the University of Wyoming.

Alfreda B. Norman
Assistant Vice President and Community Affairs Officer
Federal Reserve Bank of Dallas
Dallas, TX

Norman supports the Federal Reserve System's economic growth objectives by promoting community and economic development and fair and impartial access to credit. Norman was one of the first neighborhood development officers hired by Bank of America in Texas in 1992. In charge of developing a strategic community development plan to extend credit to low- and moderate-income communities, she went on to assume statewide Community Reinvestment Act (CRA) responsibilities with Bank of America's mortgage lending group. In addition to banking, Norman has been a supervisor in the city of Dallas Office of Cultural Affairs and held management positions at The Container Store headquarters in Dallas. Norman earned a bachelor's degree from Southern Methodist University and is a graduate of the University of Virginia's Graduate School of Retail Banking.

Janis Pappalardo
Assistant Director for Consumer Protection, Bureau of Economics
Federal Trade Commission
Washington, D.C.

Pappalardo is an assistant director for consumer protection in the Bureau of Economics at the Federal Trade Commission. She primarily studies the effect of information on consumer behavior and market outcomes. She has helped draft FTC staff advocacy comments on regulations pertaining to health claims for foods, direct-to-consumer advertising of prescription drugs, the First Amendment, and RESPA (Real Estate Settlement Procedures Act) reform. Articles authored or coauthored by Pappalardo have appeared in the Journal of Public Policy & Marketing (JPP&M), Review of Industrial Organization and Antitrust Law Journal. She serves on the editorial board of JPP&M and Villanova University's Center for Public Policy Research advisory board and served on the board of the Association for Consumer Research. Pappalardo received her Ph.D. from Cornell University.

Harvey Rosenblum
Executive Vice President and Director of Research
Federal Reserve Bank of Dallas
Dallas, TX

Rosenblum is an economic policy adviser to the president of the
Dallas Fed and an associate economist for the Federal Open Market Committee. His research interests focus on monetary policy, inflation and the growing impact of globalization on the U.S. economy and business. Rosenblum is on the boards of the Western Economic Association International and the Dallas Committee on Foreign Relations. He is also on the Advisory Council for the School of Economic, Political and Policy Sciences at the University of Texas at Dallas and a member of the Texas Product Development and Small Business Incubator Board appointed by the governor of Texas. Rosenblum serves as executive director of the International Banking, Economics and Finance Association and is a member of the editorial board of the North American Journal of Economics and Finance. His writing has been included in such publications as the Journal of Finance, New York Times, Southwest Economy and Handbook of Banking Strategy. He is an adjunct professor of finance at Southern Methodist University. Rosenblum received a B.A. in economics from the University of Connecticut and a Ph.D. in economics from the University of California at Santa Barbara.

Ebonya Washington
Henry Kohn Assistant Professor of Economics
Yale University
New Haven, CT

Washington is the Henry Kohn Assistant Professor of Economics at Yale University. She specializes in public finance and political economy with research interests in the interplay of race, gender and political representation; the behavioral motivations and consequences of political participation; and the processes through which low-income Americans meet their financial needs. Her work has appeared in journals including the American Economic Review and Quarterly Journal of Economics. She received her Ph.D. in economics from Massachusetts Institute of Technology.

 

Federal Reserve Bank of Dallas Seal
Federal Reserve Bank of Dallas

2200 N. Pearl St., Dallas, Texas 75201 | 214.922.6000 or 800.333.4460
Disclaimer / Privacy Policy

Federal Reserve Centennial