Date of Graduation


Document Type


Degree Type



College of Business and Economics



Committee Chair

M. Paula Fitzgerald

Committee Co-Chair

Vanessa G. Perry

Committee Member

Jody L. Crosno

Committee Member

Stephen He

Committee Member

Laurel A. Cook


In the past few years, we have witnessed a growing level of consumer debt. Although being in debt increases consumers’ stress and reduces their financial well-being, many consumers still take on high levels of debt and hold on to it even when they have financial resources to pay off the debt. Thus, it is of utmost importance to study factors that may influence consumers’ debt repayment. In this dissertation, I study consumers’ debt repayment behavior through the lens of the double-entry mental accounting theory (Prelec and Loewenstein 1998). This theory argues that consumers’ debt repayment behaviors are driven by pain-of-payment--negative emotion evoked when consumers become cognizant of losing their financial resources. In the first essay, I summarize the literature on pain-of-payment (PoP), and offer a new conceptualization that distinguishes between immediate and anticipatory pain of payment. In the second and third essays, I examine when and how consumers’ loan repayment behavior is influenced by anticipatory PoP. I argue that expecting high levels of anticipatory PoP associated with future debt repayments influences consumers’ likelihood of accelerating debt repayments. I refer to this tendency as the “rip off the Band-Aid” effect. This effect explains the situation when consumers pay off a loan faster than the predetermined loan term due to experiencing high levels of anticipatory PoP. In Essays II and III, I propose a few factors that would influence consumers’ tendency to rip off the Band-Aid. The findings of this research make several contributions to the literature on PoP, and also provide directions for public policymakers who seek to design interventions to nudge consumers to pay their debts.