The Economic and Financial Effects of Consumer Finance

• Applicant: Professor Jan Keil, Ph.D.
• Subject Area: Economic Policy, Applied Economics ; Accounting and Finance
• Term: from 2020 to 2024
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 452926309

• Final Report Year: 2025

Final Report Abstract

The DFG funded project resulted in three studies. In “The Economics of “Buy Now, Pay Later”: A Merchant’s Perspective“ we show that merchants can price discriminate by lowering prices particularly for low-score customers via free finance and utilizing data and technology. In “Buy Now, Pay Later and Impulse Shopping” we show that some of the popularity of this new consumer finance category can be explained by a behavioral bias. This may be potentially problematic, as ad driven BNPL users are defaulting and paying penalty fees at substantially higher rates. In “CBDCs, Payment Firms, and Geopolitics” we show that stock prices of U.S. payment firms fall as a reaction to news about the Digital Euro, while those of Europeans rise. This points to a geopolitical dimension of CBDCs and emphasizes the medium-of-exchange function of CBDCs.

Publications

• “Buy Now, Pay Later” and Impulse Shopping. SSRN Electronic Journal.
  Keil, Jan & Burg, Valentin
  
• CBDCs, Payment Firms, and Geopolitics. National Bureau of Economic Research.
  Berg, Tobias; Keil, Jan; Martini, Felix & Puri, Manju
  
• The Economics of “Buy Now, Pay Later”: A Merchant’s Perspective. National Bureau of Economic Research.
  Berg, Tobias; Burg, Valentin; Keil, Jan & Puri, Manju