The Conformity-Risk Paradox: Why Increasingly Risky Mortgages Are Acquired By Increasingly Risk-Averse Consumers
Late adopters of innovation are more conformist and risk-averse than early adopters (Rogers, 2000). In markets where product risk rises over time, this leads to a conformity-risk paradox: increasingly risky products are acquired by increasingly risk-averse consumers. We show how the paradox contributed to risky mortgage borrowing before the crisis.
Léna Pellandini-Simányi and Adam Banai (2017) ,"The Conformity-Risk Paradox: Why Increasingly Risky Mortgages Are Acquired By Increasingly Risk-Averse Consumers", in NA - Advances in Consumer Research Volume 45, eds. Ayelet Gneezy, Vladas Griskevicius, and Patti Williams, Duluth, MN : Association for Consumer Research, Pages: 809-811.
Léna Pellandini-Simányi, Università della Svizzera Italiana, Switzerland
Adam Banai, Central Bank of Hungary, Hungary
NA - Advances in Consumer Research Volume 45 | 2017
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