Situational Factors Influencing Customers' Credit Use Online: A Behavioral Economic Approach

This study investigates consumers' credit use online from the perspective of intertemporal choice and focuses on the impact of personalized credit information when choosing utilitarian versus hedonic product. In a simulated shopping experiment, participants from a Norwegian university college could either save money for the product and get it in the future or buy the product on credit and get it now. A between-group design was used with a randomized selection divided into two groups. The test group (n=37) received personalized credit information while choosing the utilitarian and hedonic products. The control group (n=36) did not have this information. Area Under Curve was calculated and used to make statistical operations. Results show that all participants discounted the saving alternative when the time delay increased, which, therefore, increased their willingness to buy on credit online. Participants' discounting of the saving alternative was near the hyperbolic model. Second, a significant difference between the utilitarian versus the hedonic products was found for all participants ' willingness to buy on credit online. Finally, personalized information about credit debt had little influence on credit use, but some indications related to hedonic product calls for further research. Implications for research and practice as well as suggestions for future studies are given.