About this Research Topic
Financial decision making is an important behavior with societal, interpersonal and individual-level outcomes. Decisions about financial issues take many forms across different sectors and products such as: mortgages, gambling, everyday consumer choices, healthcare, insurance, education, retirement, pensions, and professional or semi-professional investing (e.g., retail traders). A variety of cognitive and affective biases, defined as ‘predictable deviations from rationality,’ are known to compromise the financial decision-making process. Being ill-equipped to make sound financial decisions has been identified by the Millennium Project (a United Nations think tank) as a key issue facing humanity because of the potential devastating costs to individuals and whole societies.
In this Research Topic, we aim to focus on psychological methods and approaches that can improve the capacity to make financially sound decisions. There are several techniques that have been used to improve decision making, which include:
• ‘Debiasing’ (e.g., the reframing or ‘repackaging’ of existing information, the provision of new strategies for thinking about information);
• Decision-aiding (e.g., the development of ‘smart screens’ that offer decision-aiding facilities to professional traders);
• Decision training (e.g., using calibration and feedback techniques);
• ‘Nudging’ (e.g., the use of indirect suggestions as ways to influence the behavior and decision making of groups or individuals).
Studies have also examined other cognitive, technological and motivational strategies. These include using incentives or social accountability to mitigate the negative impact of cognitive biases or adverse decision environments, and to reduce the magnitude of judgment errors. Research has also focused on identifying which aspects of the decision making process to modify to alleviate the impact of biased decision making, such as decision readiness, modification of the person, or modification of the environment. While decision making research has spanned a wide range of applications in a variety of fields and environments (e.g., policy, business, medicine, law, and education), how to effectively improve financial decision making has received less consideration and further study is required.
The objective of this Research Topic is therefore to assemble recent advances in psychological techniques and strategies aimed to improve financial decision making. We specifically welcome research across a diversity of contexts, ranging from personal financial decisions (e.g., saving or pension investing) to financial decisions made in professional domains (e.g., banking and finance). We welcome contributions from a variety of theoretical, conceptual, and methodological approaches within psychology and its allied disciplines. Further, we welcome articles from varied domains of application (e.g., gambling, investing, saving, pensions, banking). We seek to invite empirical contributions that will inspire further advances in understanding how to improve financial decisions through strategies, techniques, and modifications, as well as novel approaches that may contribute to further insights in this Topic. Welcome article types include Original Research, Reviews, and Brief Research Reports.
Keywords: decision making, debiasing, financial decisions, money, risk
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