You can blame the speed and seeming simplicity of technology for some poor buying decisions, says Shlomo Benartzi, a UCLA behavioral economist.
Benartzi author of The Smarter Screen, studied using mobile phones to buy. Some of his key findings:
* Smartphones can make you less smart. In financial literacy, people scored significantly worse when using mobile phones vs. pen and paper. They acted faster in front of screens and relied on instinctive responses that were often incorrect. Screens made them impulsive. Research suggests that important financial transactions, like taking money out of your 401(k), should probably not be initiated on a smartphone.
* Screens heighten market losses. A 2013 study by Caltech shows that screen users were more likely to buy into a bubble. It also happens in reverse, when bubbles collapse, investors using tech were more likely to panic and sell at a loss.
With market moves triggering alerts on smartphones worldwide, the next market plunge could be led by a social media panic, Benartzi warns.
* But the right on-screen data at just the right time can help.
Writing in money.com, Benartzi and USC assistant professor Yaron Levi recently studied how one mobile app influenced spending habits.
Those using the app, which tracked spending and illustrated the impact on the user's budget and future net worth, decreased their monthly expenditures by nearly 16 percent. It encouraged them to reduce discretional spending.
The app is an example of how "just in time" information can activate users' self-control. They got information at the point where it could influence them.
