Research

Working Papers:

Rethinking the Stock Market Participation Puzzle: A Qualitative Approach (with Kamila Duraj, Daniela Grunow, Michael Haliassos, and Stephan Siegel)

We revisit the limited stock market participation puzzle leveraging a qualitative research approach that is commonly used in many social sciences, but much less so in finance or economics. We conduct in-depth interviews of stock market participants and non-participants in Germany, a high-income country with a low stock market participation rate. Differently from a survey using preset questions based on theory, we elicit views in an open-ended discussion, which starts with a general question about "money", is not flagged as regarding stock market participation, and allows for probing and follow-up questions. Many of the factors proposed by the literature are mentioned by interviewees. However, non-investors perceive surprisingly high entry and participation costs due to a fundamental misunderstanding of the potential for selecting "good" stocks and avoiding "bad" ones and for market timing through frequent trading. Surprisingly, the investors we interview often share these views. However, they find a way to overcome these costs with the help of family, friends, or financial advisors they trust.While the insights from our qualitative interviews are based on a small number of interviewees, we find consistent evidence in a population-wide survey of investors and non-investors.

Buy now pay (less) later: The benefits of private BNPL information  (with Elin Molin, Kasper Roszbach, and Talina Sondershaus)

Buy Now, Pay Later loans (BNPL) are an increasingly popular way to finance smallticket purchases. We provide new evidence on how BNPL influences regular bank credit markets, benefiting both lenders and borrowers through information production and learning. Using data from over one million unsecured bank loan applications from a bank that also provides BNPL services, we exploit the fact that BNPL enhances the bank's ability to assess creditworthiness by incorporating transaction data beyond shared credit registers. We establish four key findings. First, BNPL users are more likely to be approved for bank loans due to lower internally assessed credit risk, while those with late BNPL payments face lower approval rates. Second, BNPL customers benefit from discounted interest rates, while the bank earns a profit margin by price discriminating among customers with a good internal payment history but differing external credit scores. Third, customers with a BNPL history exhibit better repayment behavior and lower default rates, partly driven by improved loan terms. Fourth, learning effects from prior BNPL use likely reinforce this behavior. Our findings suggest that BNPL improves risk assessment and fosters learning, enhancing credit outcomes and access for higher-risk borrowers, thereby promoting financial inclusion.

Disparities in financial literacy, pension planning, and saving (with Tabea Bucher-Koenen, Andreas Hackethal, and Johannes Kasinger)

Financial literacy affects wealth accumulation, and pension planning plays a key role in this relationship. In a large field experiment, we employ a digital pension aggregation tool to confront a treatment group with a simplified overview of their current pension claims across all pillars of the pension system. We combine survey and administrative bank data to measure the effects on actual saving behavior. Access to the tool decreases pension uncertainty for treated individuals. Average savings increase—especially for the financially less literate. We conclude that simplification of pension information can potentially reduce disparities in pension planning and savings behavior.