DOI: 10.5176/2251-1865_CBP13.44
Authors: Fernanda Jesus, José Miguel Oliveira
Abstract:
The growing numbers of overindebted families over the last decade had become a serious problem in Portugal, with complex personal, social and dreary economic consequences (Frade, Jesus, & Lopes, 2011). Credit is a special form of consumption in which products are obtained now and overall payment is partitioned over time. Therefore, analysis of credit decision-making necessarily involves understanding how people subjectively perceive time in these particular contexts and how it impacts on decision-making patterns. In the context of time discounting studies (Frederick, Lowenstein, & O’Donoghue, 2002), focusing on measuring subjective time perception for discount rate calculation (Zauberman, Kim, Malkoc, & Bettman, 2009), we present a series of experiments whereby credit repayment perceived effort is measured for each installment across different time horizons depicted over a range of credit proposal scenarios. Partition of extended experiences over time (Ariely & Zauberman, 2003) and the hidden-zero effect (Magen, Dweek, & Gross, 2008), known for enhancing awareness of the sequence of outcomes involved in a choice, were also used across credit scenarios. Evaluation and discussion of how subjective time perception and hidden-zero effect impact on payment perceived effort are given.
Keywords: time discounting; time horizons; subjective time perception; credit decision-making
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