Smartphone use increases the likelihood of making short-sighted financial decisions

Abstract

Contextualizing in the digitalization of personal finance (e.g., mobile banking), the present research explores how financial decisions made on smartphones (vs. laptops or tablets) are more likely to be shortsighted, manifesting in being unwilling to save for retirement, referring to recent information while making financial decisions, and opting for instant but smaller rewards. We trace the effect to smartphones’ affordance of ubiquity, an attribute that allows users to satisfy various needs with considerable flexibility of time and space and prompts users to seek instant gratifications. We also rule out potential alternative factors that might account for this effect, including haptic gratification, direct-touch effect, task difficulty, thinking style, concentration, and the hedonic usage of the devices by users. Furthermore, we demonstrate that prompting users to deliberate on their decisions successfully attenuates the effect. Implications for the development of interventions are discussed.