Towards a Dual Process Conception of the Selective Influence of Financial Literacy on Economic Behavior

Download or read book Towards a Dual Process Conception of the Selective Influence of Financial Literacy on Economic Behavior written by Eyal Carmel and published by . This book was released on 2018 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This dissertation addresses this research gap by presenting a new theoretical model for financial literacy - the Cognitive Modulation of Economic Behavior [CMEB] that relates availability of cognitive and mental resources with factors that influence individuals' ability to rely on their knowledge. The CMEB model stems from Dual Process Models such as Kahneman's two systems model (Kahneman, 2011) and Thaler and Shefrin's model of self-control (Thaler & Shefrin, 1981). Such models distinguish between intuitive behaviors that rely on rapid, effortless thinking, and calculated decisions that require deliberate thinking and demand cognitive and mental effort. The CMEB model translates this perception into the field of financial literacy and suggests that financial literacy-based behavior requires mental effort and cognitive resources. Therefore, in order to understand the conditions by which financial literacy would influence economic behavior, we must first consider the amount of cognitive and mental resources available to, and required from, the decision maker." -- from the abstract.