Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit

David M. Becker, Lena Jaroszek, Martin Weber

Publikation: KonferencebidragPaperForskning

Resumé

Short-term credit serves bridging short-term liquidity gaps. Instead, short-term credit is often used over an extended period of time. Such behavior could stem from individuals’ preference for immediate consumption. We thus analyze, whether short-term credit usage, specifically overdraft usage, is related to time preferences. Combining bank account data with survey responses provides us with evidence that individuals with higher implied discount rates use overdrafts more frequently. We disentangle a normative and a behavioral explanation. Our results are consistent with the existence of self-control problems in the form of present-biased
time preference.
OriginalsprogEngelsk
Publikationsdato2017
Antal sider66
StatusUdgivet - 2017
BegivenhedYoung Scholars Nordic Finance Workshop 2017 - Aarhus University, Aarhus, Danmark
Varighed: 23 nov. 201724 nov. 2017
http://econ.au.dk/facultyandstaff/sections/accounting-and-finance/young-scholars-nordic-finance-workshop/

Konference

KonferenceYoung Scholars Nordic Finance Workshop 2017
LokationAarhus University
LandDanmark
ByAarhus
Periode23/11/201724/11/2017
Internetadresse

Citer dette

Becker, D. M., Jaroszek, L., & Weber, M. (2017). Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit. Afhandling præsenteret på Young Scholars Nordic Finance Workshop 2017, Aarhus, Danmark.
Becker, David M. ; Jaroszek, Lena ; Weber, Martin. / Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit. Afhandling præsenteret på Young Scholars Nordic Finance Workshop 2017, Aarhus, Danmark.66 s.
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abstract = "Short-term credit serves bridging short-term liquidity gaps. Instead, short-term credit is often used over an extended period of time. Such behavior could stem from individuals’ preference for immediate consumption. We thus analyze, whether short-term credit usage, specifically overdraft usage, is related to time preferences. Combining bank account data with survey responses provides us with evidence that individuals with higher implied discount rates use overdrafts more frequently. We disentangle a normative and a behavioral explanation. Our results are consistent with the existence of self-control problems in the form of present-biasedtime preference.",
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Becker, DM, Jaroszek, L & Weber, M 2017, 'Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit' Paper fremlagt ved Young Scholars Nordic Finance Workshop 2017, Aarhus, Danmark, 23/11/2017 - 24/11/2017, .

Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit. / Becker, David M.; Jaroszek, Lena; Weber, Martin.

2017. Afhandling præsenteret på Young Scholars Nordic Finance Workshop 2017, Aarhus, Danmark.

Publikation: KonferencebidragPaperForskning

TY - CONF

T1 - Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit

AU - Becker, David M.

AU - Jaroszek, Lena

AU - Weber, Martin

PY - 2017

Y1 - 2017

N2 - Short-term credit serves bridging short-term liquidity gaps. Instead, short-term credit is often used over an extended period of time. Such behavior could stem from individuals’ preference for immediate consumption. We thus analyze, whether short-term credit usage, specifically overdraft usage, is related to time preferences. Combining bank account data with survey responses provides us with evidence that individuals with higher implied discount rates use overdrafts more frequently. We disentangle a normative and a behavioral explanation. Our results are consistent with the existence of self-control problems in the form of present-biasedtime preference.

AB - Short-term credit serves bridging short-term liquidity gaps. Instead, short-term credit is often used over an extended period of time. Such behavior could stem from individuals’ preference for immediate consumption. We thus analyze, whether short-term credit usage, specifically overdraft usage, is related to time preferences. Combining bank account data with survey responses provides us with evidence that individuals with higher implied discount rates use overdrafts more frequently. We disentangle a normative and a behavioral explanation. Our results are consistent with the existence of self-control problems in the form of present-biasedtime preference.

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KW - Credit lines

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KW - Impulsiveness

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Becker DM, Jaroszek L, Weber M. Borrower Heterogeneity and the (Ir)Rational Demand for Short-Term Credit. 2017. Afhandling præsenteret på Young Scholars Nordic Finance Workshop 2017, Aarhus, Danmark.