Moral Incentives in Credit Card Debt Repayment
Evidence from a Field Experiment
Bibliographic Data
| ID | 10175408 |
|---|---|
| Authors | Leonardo Bursztyn (National Bureau of Economic Research), Stefano Fiorin (0000-0002-6513-366X, University of California San Diego), Daniel Gottlieb (0000-0002-0555-6185, Washington University in St. Louis), Martin Kanz (Centre for Economic Policy Research) |
| Year | 2018 |
| Volume | 127 |
| Issue | 4 |
| Pages | 1641-1683 |
| Publication date | 2018-11-09 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/701605 |
| OpenAlex | W4285791392 |
| Language | EN |
| Citations received | 21 |
| References cited | 31 |
We study the role of morality in debt repayment, using an experiment with the credit card customers of a large Islamic bank in Indonesia. In our main treatment, clients receive a text message stating that "non-repayment of debts by someone who is able to repay is an injustice." This moral appeal decreases delinquency by 4.4 percentage points from a baseline of 66 percent and reduces default among customers with the highest ex ante credit risk. Additional treatments help benchmark the effects against direct financial incentives and rule out competing explanations, such as reminder effects, priming religion, and provision of new information
Actuarial science · Appeal · Business · Credit card · Debt · Economics · Ex-ante · Incentive · Information asymmetry · Injustice · Microeconomics · Monetary economics · Moral hazard · Morality · Political science · Priming (agriculture · Culture, Economy, and Development Studies · Finance · Islamic Finance and Banking Studies · Law · Psychology · Social Psychology · Taxation and Compliance Studies
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| Citations per year | 3 |
|---|---|
| Citation span | 2019 - 2026 (8) |
| Highly cited | No |