Cognitive Biases in Financial Decisions Made by Teenagers

Teenagers are a vital part of the economy today and make up a large proportion of the consumer industry. In a highly digitalised world, teenagers and adolescents have a strong and active presence on social media and influencers and marketers are reaching out to this demograph who are now a backbone in the decision making process in most families. Behavioral Economics, a relatively recent branch of the science, unlike traditional approaches which believe that people make economic and financial decisions on utility, suggests that financial decisions are more likely to be made by people on the basis of their inherent cognitive biases, their sense of fairness and psychological biases such as loss aversion and overconfidence bias. This study aims to extend this hypothesis to study adolescent and teenage behavioural patterns and answer the question how.