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Three Essays On The Effect Of Pain-Of-Payment On Consumers' Financial Decisions, Farnoush Reshadi

Graduate Theses, Dissertations, and Problem Reports

In the past few years, we have witnessed a growing level of consumer debt. Although being in debt increases consumers’ stress and reduces their financial well-being, many consumers still take on high levels of debt and hold on to it even when they have financial resources to pay off the debt. Thus, it is of utmost importance to study factors that may influence consumers’ debt repayment. In this dissertation, I study consumers’ debt repayment behavior through the lens of the double-entry mental accounting theory (Prelec and Loewenstein 1998). This theory argues that consumers’ debt repayment behaviors are driven by pain-of-payment--negative …