Keeping Consumers in the Red: Hedonic Debt Prioritization Within Multiple Debt Accounts

Ali Besharat, University of Denver
Sajeev Varki, University of South Florida
Adam Craig, University of Kentucky, USA
Prior literature has demonstrated that consumers behave irrationally by paying down smaller balances instead of higher interest balances. Across three experiments, debt type (hedonic versus utilitarian) exacerbates the effect and we document anticipated consumption enjoyment as a mediator. Further, timing of the debt moderates debt type effects on account aversion.
[ to cite ]:
Ali Besharat, Sajeev Varki, and Adam Craig (2014) ,"Keeping Consumers in the Red: Hedonic Debt Prioritization Within Multiple Debt Accounts", in NA - Advances in Consumer Research Volume 42, eds. June Cotte and Stacy Wood, Duluth, MN : Association for Consumer Research, Pages: 413-414.