Psychological processes behind debt account aversion
- The Prospect Theory suggests individuals are more sensitive to a loss than a gain of an equal amount. The urge to get in the black is so strong that people are motivated to pay off small debs without considering their interest rates.
- The Goal-Gradient Theory supposes that consumers are more willing to make an effort towards small debt just to finish paying them off.
- People do not take into account how interest compounds over time.
63
295 reads
CURATED FROM
IDEAS CURATED BY
The idea is part of this collection:
Learn more about moneyandinvestments with this collection
How to create a diversified portfolio
How to analyze stocks and bonds
Understanding the basics of investing
Related collections
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Personalized microlearning
—
100+ Learning Journeys
—
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates