Psychophysics of Consumer’s Sequence Preference of E-commerce Loan Repayments

Abstract

Abstract As E-commerce shopping has been growing rapidly in China, many consumers use loans to make a purchase, and then payoff the loan by installments. Recently studies show that all amortizing loans can be viewed a sequence of payments, and consumers prefer a decreasing sequence for a car loan. In this paper, we investigated consumers’ preference of payment sequence for a less valued online purchased commodity, a smart phone. Results show consumers prefer constant sequence over decreasing sequence, indicating that consumers have unique perception of sequence for a smaller amount and shorter term loan, and they may choose constant sequence for convenience. E-commerce credit provider shall stick with the constant repayment plan.