0 Information Disclosure, Cognitive Biases and Payday Borrowing

We study whether additional, psychology-guided information disclosure induces payday borrowers to lower their use of high-cost debt a field experiment at a national chain of payday lenders. We find that information that helps people think less narrowly (over time) about the cost of payday borrowing, and in particular information that reinforces the adding-up effect over pay cycles of the dollar fees incurred on a payday loan in comparison to the fees on other financial instruments, reduces the take-up of payday loans by about 11 percent in a 4 month-windo