Conference showcases the cross-disciplinary cooperation needed to steer people toward better financial choices.
Consumer finance is not just about finance.
The annual Boulder Summer Conference on Consumer Financial Decision Making brings together thought leaders and practitioners in far-flung disciplines like behavioral science, anthropology, risk, law and family studies—a recognition that this discipline is a truly interdisciplinary one.
“We are very intentional about how we put this event together,” said Prof. Tony Cookson, co-director of the Center for Research on Consumer Financial Decision Making and faculty director of master’s program in Finance at the Leeds School of Business. “We source as many different perspectives as possible, and pair them in ways that we hope stimulate thought-provoking conversation.”
Largest conference 'by far'
The challenge this year was that, owing to the pandemic, the conference was presented virtually for the first time. The opportunity, though, was that more than 250 scholars and practitioners registered to attend the three-day event; while paper presentations and audience Q&As ran as usual on Zoom, Cookson helped create a lively Slack channel that built upon the discussion and allowed experts to engage with other attendees in a loosely structured format resembling the coffee-break chatter of an in-person conference.
“It was our largest conference ever, by far,” said Prof. Phil Fernbach, also co-director of the Center. “We also had more than 150 submissions to the conference—and the quality of those submissions was so high that it was extremely difficult to select papers for inclusion.”
That was especially true because of how carefully professors Fernbach and Cookson paired papers to offer cross-disciplinary discussion of noteworthy topics. For instance, a session on nudging consumers featured two presenters—Paul Adams, a senior behavioral economist to the financial regulatory arm of the Netherlands Authority, and Kellen Mrkva, of Columbia University—who went beyond the effectiveness of influencing consumer behavior, examining ethical nuance and potential guidelines for regulators.
Mrkva, who was presenting a paper that’s forthcoming in the Journal of Marketing, considered three kinds of nudges and how they could be employed to help people with low financial literacy make more informed decisions. For instance, a credit card company could preselect a monthly repayment option above the minimum, to nudge consumers to avoid taking on expensive debt.
“People with lower socioeconomic status are much more likely to choose whatever that default is,” Prof. Mrkva said. “When it comes to reducing disparities between high- and low-literacy groups, financial training is costly and doesn’t always show long-term benefit. Nudges are cheap, and they work.”
Discussant Daniel Egan, director of behavioral finance and investing at fintech Betterment, said that introduces a systemic problem of relying on “the benevolence of the designer. Because bad nudges are also effective, especially since people believe the default selection doesn’t influence their decision.” He also raised the issue of trust, and whether people with less financial literacy may be more distrustful of groups that have taken advantage of them in the past.
Other topics at the conference produced similar deep dives, including sessions on how to offer proper protections for underbanked consumers, whether lotteries or other interventions are effective in encouraging consumers to save and how a merged bank account might offer connubial bliss to newlyweds.
That cross-disciplinary approach was something Leeds Dean Sharon Matusik discussed during her opening remarks.
“Bringing together experts from different disciplines and sectors is central to our vision, in terms of what will be important in driving the future forward,” Dean Matusik said. “To solve problems of increasing complexity requires collaboration like what this conference fosters every year.”