Nudge of shared information responsibilities: a meso-economic perspective of the Italian consumer credit reform

  • Umberto FilottoEmail author
  • Caterina Lucarelli
  • Nicoletta Marinelli


Irrational debt decisions at the individual level may harm collective welfare. For this reason, regulators are committed to encourage information-based behaviours in order to enhance likelihood of appropriate indebtedness. We analyse, with a diff-in-diff estimator, the Italian case offered by the Legislative Decree that reformed the consumer credit market adopting European Directive 2008/48/EC, and that reinforced the mandatory information acquisition, jointly asked to lenders and borrowers, before granting/receiving consumer credit. By using micro-data on 60.000 consumer credit borrowers, in total, randomly sampled from the most relevant Italian Credit Bureau, our findings support that, in the medium term, the new consumer credit regulation has improved borrowers’ repayment ability, enhancing the quality of credit distribution. Nevertheless, a simplistic ‘better information-better behaviour’ relationship cannot be assured. This success is likely due to conjunct adaptation of behaviours, with shared responsibilities experienced on both the demand and offer side of the consumer credit marketplace.


Consumer credit Information paradigm Behavioural biases Credit register Repayment ability 



  1. Ausubel LM (1991) The failure of competition in the credit card market. Am Econ Rev 81(1):50–81Google Scholar
  2. Bajo E, Barbi M (2015) Out of sight, out of mind: financial illiteracy, inattention, and sluggish mortgage refinancing, Working PaperGoogle Scholar
  3. Bertrand M, Karlan D, Mullainathan S, Shafir E, Zinman J (2005) What’s psychology worth? A field experiment in the consumer credit market, Massachussetts: National Bureau of Economi Research, 2005, Working Paper 11892Google Scholar
  4. Bertrand M, Karlan D, Mullainathan S, Shafir E, Zinman J (2010) What’s advertising content worth? Evidence from a consumer credit marketing field experiment. Q J Econ, Oxford University Press 125(1):263–306CrossRefGoogle Scholar
  5. Bhutta N, Skiba PM, Tobacman J (2015) Payday loan choices and consequences. J Money Credit Banking 47(2–3):223–260CrossRefGoogle Scholar
  6. Bos J, De Haas R, Millone M (2015) Show me yours and I’ll show you mine: sharing borrower information in a competitive credit market. European Banking Center Discussion Paper No. 2015-007/027Google Scholar
  7. Bradley M, Chen D (2015) Does board independence reduce the cost of debt? Financ Manage 44(1):15–47CrossRefGoogle Scholar
  8. Cameron S, Golby D (1990) An economic analysis of personal debt. Bull Econ Res 42(3):241–247CrossRefGoogle Scholar
  9. Caratelli M, Filotto U, Mattarocci G, Viale R (2015) Empowering borrowers: Is the APR the most appropriate choice indicator? A behavioral and empirical analysis. In: EUROPEAN BANKING 3.0—Bank Industry and Supervision in the Behavioural Finance Revolution—Bracchi, Umberto, Masciandaro, Editors, Edibank, Roma 2015Google Scholar
  10. D’Alessio G, Iezzi S (2013) Household over-indebtedness: definition and measurement with Italian data. Questioni di Economia e Finanza (Occasional Paper), n. 149, pp 1–28Google Scholar
  11. de Janvry A, McIntosh C, Sadoulet E (2010) The supply- and demand-side impacts of credit market information. J Dev Econ 93(2):173–188CrossRefGoogle Scholar
  12. Disney R, Gathergood J (2013) Financial literacy and consumer credit portfolios. J Bank Finance 37(7):2246–2254CrossRefGoogle Scholar
  13. Dobbie W, Skiba PM (2013) Information asymmetries in consumer credit markets: evidence from payday lending. Am Econ J Appl Econ 5(4):256–282CrossRefGoogle Scholar
  14. Gathergood J (2012) Self-control, financial literacy and consumer over-indebtedness. J Econ Psychol 33(3):590–602CrossRefGoogle Scholar
  15. Howells G (2005) The potential and limits of consumer empowerment by information. J Law Soc 32(3):349–370CrossRefGoogle Scholar
  16. Imbens GW, Wooldridge JM (2009) Recent development in the econometrics of program evaluation. J Econ Lit 47:5–86CrossRefGoogle Scholar
  17. Kurz-Milcke E, Gigerenzer G, Martignon L (2008) Transparency in risk communication graphical and analog tools. Ann N Y Acad Sci 1128:18–28CrossRefGoogle Scholar
  18. Laibson D (1997) Golden eggs and hyperbolic discounting. Q J Econ 112(2):443–477CrossRefGoogle Scholar
  19. Lucarelli C Brighetti G (eds) (2011) Risk tolerance in financial decision-making editors. Palgrave Macmillan, UKGoogle Scholar
  20. Lusardi A, Mitchell OS (2011) Financial literacy around the world: an overview. NBER Working Paper No. 17107, pp 1–19Google Scholar
  21. McCorkell PL (2002) The impact of credit scoring and automated underwriting on credit availability. In: Durkin TA, Staten ME (eds) The impact of public policy on consumer credit. Springer, Boston, MAGoogle Scholar
  22. Meier S, Sprenger C (2010) Present-biased preferences and credit card borrowing. Am Econ J Appl Econ 74(2):1–11Google Scholar
  23. Oehler A, Wendt S (2017) Good consumer information: the information paradigm at its (dead) end? J Consum Policy 40(2):179–191CrossRefGoogle Scholar
  24. Rosenbaum PR, Rubin DB (1983) The central role of the propensity score in observational studies for causal effects. Biometrika 70:41–55CrossRefGoogle Scholar
  25. Schelling TC (1984) Self-command in practice, in policy, and in theory of rational choice. Am Econ Rev 2(1):193–210Google Scholar
  26. Seaward GWH, Kemp S (2000) Optimism bias and student debt. NZ J Psychol 29(1):17–19Google Scholar
  27. Shefrin HM, Thaler RH (1988) The behavioral life-cycle hypothesis. Econ Inq 26(4):609–643CrossRefGoogle Scholar
  28. Stango V, Zinman J (2009) Exponential growth bias and household finance. J Finance 64(6):2807–2849CrossRefGoogle Scholar
  29. Thaler RH (1981) Some empirical evidence on dynamic inconsistency. Econ Lett 8:201–207CrossRefGoogle Scholar
  30. Wang XT (1996) Domain-specific rationality in human choices: violations of utility axioms and social contexts. Cognition 60(1):31–63CrossRefGoogle Scholar
  31. Winston GC (1980) Addiction and backsliding: a theory of compulsive consumption. J Econ Behav Organ 1:295–324CrossRefGoogle Scholar
  32. Zinman J (2010) Restricting consumer credit access: Household survey evidence on effects around the Oregon rate cap. J Bank Finance 34(3):546–556CrossRefGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.University of Rome “Tor Vergata”RomeItaly
  2. 2.University Politecnica MarcheAnconaItaly
  3. 3.University of MacerataMacerataItaly

Personalised recommendations