Academy of Financial Services
This study explored the determinants of consumer borrowing by a couple as a function of collective bargaining between two partners with different intertemporal preferences. An accountant-shopper collective bargaining framework was developed for this purpose. A sample of households was extracted from De Nederlandsche Bank Household Survey, which allows for dyadic data analysis. Logistic regression was used to model the likelihood of a household reporting the use of consumer debt. Consistent with theoretical predictions, the bargaining power of the future-oriented accountant had a negative influence on the use of consumer debt; and the bargaining power of the present-oriented shopper had a positive influence on the use of consumer debt. Several implications for future research are discussed.
Author(s): David Allen Ammerman, Maurice MacDonald