Next Article in Journal
The Effect of Quantitative Easing through Google Metrics on US Stock Indices
Previous Article in Journal
Corporate Social Practices and Firm Financial Performance: Empirical Evidence from France
Article

Buy Now and Pay (Dearly) Later: Unraveling Consumer Financial Spinning

ICN Business School, CEREFIGE, University of Lorraine, CEDEX, 54003 Nancy, France
Academic Editor: Sabri Boubaker
Int. J. Financial Stud. 2021, 9(4), 55; https://doi.org/10.3390/ijfs9040055
Received: 15 July 2021 / Revised: 19 September 2021 / Accepted: 27 September 2021 / Published: 29 September 2021
In this challenging and innovative article, we propose a framework for the consumer behavior named “consumer financial spinning”. It occurs when borrowers-consumers of products with high financial stakes accumulate unsustainable debt and disconnect from their initial financial hierarchy of needs, wealth-related goals, and preferences over their household portfolio of assets. Three behaviors characterize daredevil consumers as they spin their wheel of misfortune, which together form a dark financial triangle: overconfidence, use of rationed rationality, and deceitfulness. We provokingly adapt some of the tenets of the Markowitz and Capital Asset Pricing models in the context of the predatory paradigm that consumer financial spinning entails and use modeling principles from the data percolation methodology. We partially test the proposed framework and show under what realistic conditions the relationship between expected returns and risk may depart from linearity. Our analysis and results appear timely and important because a better understanding of the psychological conditions that fuel intense speculation may restrain market frictions, which historically have kept reappearing and are likely to reoccur on a regular basis. View Full-Text
Keywords: consumer financial spinning; dark financial triangle; deception; overconfidence; rationality; risk consumer financial spinning; dark financial triangle; deception; overconfidence; rationality; risk
Show Figures

Figure 1

MDPI and ACS Style

Mesly, O. Buy Now and Pay (Dearly) Later: Unraveling Consumer Financial Spinning. Int. J. Financial Stud. 2021, 9, 55. https://doi.org/10.3390/ijfs9040055

AMA Style

Mesly O. Buy Now and Pay (Dearly) Later: Unraveling Consumer Financial Spinning. International Journal of Financial Studies. 2021; 9(4):55. https://doi.org/10.3390/ijfs9040055

Chicago/Turabian Style

Mesly, Olivier. 2021. "Buy Now and Pay (Dearly) Later: Unraveling Consumer Financial Spinning" International Journal of Financial Studies 9, no. 4: 55. https://doi.org/10.3390/ijfs9040055

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop