Behavioral Finance and Financial Literacy: Educational Implications of Biases in Financial Decision Making

Loerwald, Dirk; Stemmann, Arne

doi:10.1007/978-981-10-0360-8_3

Cited by 28 publications

(20 citation statements)

References 12 publications

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“…How can financial literacy have an impact on the process of saving for retirement? Daxhammer and Facsar (2012) suggest that there are three phases of a decision-making process in a financially significant life situation (Loerwald and Stemmann, 2016). Financial literacy, "the ability to process economic information and make informed decisions about household finances" (Behrman et al, 2012), can play an important role in the process, resulting in decisions with varying degrees of quality.…”

Section: Hypotheses Of the Effects Of Financial Literacymentioning

confidence: 99%

“…They tend to hold onto falling shares and the respective loss, while making profits by prematurely selling their rising shares. Such investors are vulnerable to increased risk-seeking in situations where losses have already been incurred, possibly leading to greater losses (Loerwald and Stemmann, 2016). Loss aversion bias can also lead to status quo bias, referring to the tendency to do nothing, and thus influence one's under-preparing for retirement (Samuelson and Zeckhauser, 1988).…”

Section: Hypotheses Of the Effects Of Financial Literacymentioning

confidence: 99%

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An empirical study on how financial literacy contributes to preparation for retirement

Yeh

2020

Journal of Pension Economics and Finance

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This study provides empirical evidence on the mechanisms through which financial literacy may be associated with saving for retirement, in the three phases of the decision-making process – information perception, information search and evaluation, and decision-making and implementation. The results indicate that financial literacy has significantly positive effects on one's awareness of post-retirement financial needs, comparing alternatives when purchasing financial products, displaying fewer present-time bias, and planning for and setting aside funds for retirement. Financial literacy not only directly contributes to planning for the future, but also indirectly via a reduction in behavioral biases.

show abstract

Section: Hypotheses Of the Effects Of Financial Literacymentioning

confidence: 99%

Section: Hypotheses Of the Effects Of Financial Literacymentioning

confidence: 99%

An empirical study on how financial literacy contributes to preparation for retirement

Yeh

2020

Journal of Pension Economics and Finance

View full text Add to dashboard Cite

show abstract

“…Economic analysis of general selection theory or law. On the other hand, this approach has been criticized from various academic perspectives since the days of the theory of rational selection [27]. Likewise, we don't try to at the same time address the normal issue of individual security choice, the division of property among homegrown and global resources, and cash supporting.…”

Section: Investment Choicesmentioning

confidence: 99%

A Review on Investment behavior and Decisions

2021

JEMM

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“…Several studies focus on applying such intervention-based strategies to improve financial literacy [6,16,24,29,43,52,62]. While most of the research follows a traditional approach in terms of improving financial cognitive abilities, only a few focus on youth [5,22,27,28,32,45,52]. Financial literacy enhancement in young people is an interesting scenario.…”

Section: Literature Reviewmentioning

confidence: 99%

FinCraft: Immersive Personalised Persuasive Serious Games for Financial Literacy Among Young Decision-Makers

et al. 2020

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FinCraft is an open source gaming platform to enhance financial literacy. Research has shown a growing concern for financial literacy and financial decision-making across several age groups and interventionist programme methods. However, very few focused on the youth demographic specifically. Fewer, considered fun and sustainable means of financial literacy enhancement. In a day and age of instant gratification, people gravitate towards familiar and engaging content. In this paper, we posit starting financial literacy enhancement early -during the teenage years of individuals, so secure saving and spending habits can be adopted prior to adult years and responsibility. Through gamification, FinCraft aims to bridge the familiarity and engagement gap that makes financial literacy, an unexplored, significant part of growing up. We propose various conceptual and system artefacts at the intersection of serious games and learning analytics for financial literacy..

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Behavioral Finance and Financial Literacy: Educational Implications of Biases in Financial Decision Making

Cited by 28 publications

References 12 publications

An empirical study on how financial literacy contributes to preparation for retirement

An empirical study on how financial literacy contributes to preparation for retirement

A Review on Investment behavior and Decisions

FinCraft: Immersive Personalised Persuasive Serious Games for Financial Literacy Among Young Decision-Makers

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