I'm an Assistant Professor of Finance at the University of Houston. My research is on Household Finance with a focus on how psychological biases in consumer behavior affect markets.
Email: pcmedina@uh.edu
Publications
FinTech Lending to Borrowers with No Credit History With Laura Chioda, Sean Higgins and Paul Gertler Conditionally Accepted at Journal of Financial Economics
The Effect of Stock Ownership on Individual Spending, Investments and Loyalty With Vrinda Mittal and Michaela Pagel Forthcoming at Management Science
When Consumer Financial Protection Spills Over: Student Loan Borrowing under the CARD Act With A. Brown and D. Grodzicki Forthcoming at Management Science
Does Saving Cause Borrowing? Implications for the Co-Holding Puzzle With M. Pagel The Journal of Finance, Volume 80, Issue 5, October 2025, Pages 2689-2738.
Refinancing Inequality During the COVID-19 Pandemic With S. Agarwal, S. Chomsisengphet, H. Kiefer and L. Kiefer Journal of Financial and Quantitative Analysis, August 2024; 59(5):2133-2163.
The Hidden Role of Contract Terms: The Case of Credit Card Minimum Payments in Mexico. With J. Negrin. Management Science, May 2022; 68(5):3856-77.
Side Effects of Nudging: Evidence from a Randomized Intervention in the Credit Card Market The Review of Financial Studies, Volume 34, Issue 5, May 2021, Pages 2580–2607
Working Papers
Cash or Card? Evidence from a Large-Scale Field Experiment to Increase Consumers' Debit Card Use With Chuck Howard, Michael King and Roland Umanan.
Cash remains a dominant payment method in many markets despite the widespread availability of digital alternatives such as debit cards, creating costs for consumers, firms, and governments. This research examines which interventions most effectively increase debit-card use, how effectiveness varies with incentive form and amount, and whether average effects conceal meaningful differences across customers. A large-scale randomized field experiment with approximately 1.5 million customers of a Mexican bank tests cash and gift-card incentives of 60 and 300 MXN, repeated benefit-focused nudges, and combinations of nudges with cash incentives. Estimated treatment effects on debit-card transaction frequency and spending range from approximately 0\% to 5\%, with larger incentives producing less-than-proportional gains in transaction frequency and incentive-form effects varying across outcomes and incentive amounts. Causal-forest estimates show substantial treatment-effect heterogeneity: for example, the effect of the 300 MXN cash incentive is concentrated among customers with relatively high baseline debit-card use, while some near-zero average effects mask offsetting positive and negative subgroup responses. Nudges have small nonsignificant effects alone and no detectable incremental effect when combined with cash incentives. These findings show that effective payment-activation strategies depend not only on intervention design but also on which customers receive them.
Mental Models of Credit Card Borrowing With Antonio Gargano
We study how individuals evaluate the cost of credit card borrowing using a survey linked to administrative data and experimental variation in credit card interest rates. Survey responses indicate that many individuals do not calculate interest costs when making purchasing or repayment decisions. Instead, they appear to follow a binary mental model of credit card costs, attempting to avoid paying interest altogether regardless of the size of the interest charge, rather than responding to the magnitude of the interest rate. Consistent with this behavior, credit card borrowing is highly inelastic to exogenous increases in interest rates and individuals who report not calculating interest costs when making purchasing or repayment decisions exhibit lower sensitivity to changes in interest rates. This pattern is not explained by differences in credit scores, liquidity constraints, time preferences, or numeracy.
What Matters for Consumer Credit Choice? Evidence from the Philippine Digital Credit Market With Michael King, Benjamin Radoc and Roland Umanan.
Using an online discrete choice experiment with digital credit users in the Philippines, we study the impact of disclosures about price and non-price product attributes on consumer choice. Compared to when information is displayed as in traditional marketing campaigns, standardizing contract terms across products leads consumers to choose digital loans with lower interest rates and higher probability of approval at the expense of longer time to disburse and higher documentation requirements. Presenting interest rates in effective (compounded) or nominal terms makes no difference but, ranking by an attribute leads to the choice of products that are more favorable on that attribute. Finally, while on average, consumers are responsive to disclosures about late payment fees, overconfident consumers are not. We argue that overconfidence limits the effectiveness of attention-based interventions focused on contingent fees and, in the presence of asymmetric information, reduces the amount of information consumers reveal through their choices about their risk profiles.
Short notes (Archived)
Learning and Endogenous Limitations of Exploitation in Dynamic Contracts: A brief note.
In this brief note, I consider the problem of a profit maximizing firm facing a time inconsistent and partially naive consumer who learns about her own preferences over time. Under certain conditions on the structure of consumers beliefs, a profit maximizing firm will distort his contract offer forgoing profits today to hamper consumer learning, and ultimately increase the naivete remaining the next period. Compared to the static scenario without learning, the resulting contract is initially less exploitative for consumers, but this feature turns out to be only temporary since in the second period an exploitative contract replaces the full commitment device a monopolist would offer otherwise in the last period. The results are tailored to be interpreted in the context of credit markets based on the setting introduced by Heiduhes and Koszegi (2010).