Volume 14, Issue 54 (Spring 2026)
IUESA 2026, 14(54): 149-164 |
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Taghavi S A, Faez Z. The Role of Financial Technology (FinTech) in Urban Economics: A Behavioral Finance Approach. IUESA 2026; 14 (54) :149-164
URL: http://iueam.ir/article-1-2289-en.html
URL: http://iueam.ir/article-1-2289-en.html
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Abstract: (6 Views)
Abstract
Introduction and Objective: The rapid expansion of financial technology within urban ecosystems has raised new questions regarding how this technology influences the economic behavior of citizens. The present study was conducted to explain the role of financial technology in urban economics through the lens of behavioral finance.
Methodology: This study was carried out using a qualitative-analytical approach and a systematic literature review. Based on the 2025 systematic review, 42 eligible studies were selected from معتبر international databases (Web of Science and Scopus) covering the period from 2024 to 2026. Data were analyzed using directed content analysis and conceptual mapping.
Findings: The results showed that financial technology affects urban economics through two channels: a direct channel (reducing transaction costs) and an indirect channel (activating behavioral biases). Three key behavioral biases—framing effect, algorithmic overconfidence, and herding behavior—were identified as the strongest indirect channels. In addition, a paradoxical reduction in loss aversion in the FinTech context was confirmed. Another important finding was the significant difference in behavioral patterns across urban areas: residents of central urban districts showed greater sensitivity to framing effects and herding behavior, whereas residents of peripheral areas were strongly influenced by anchoring bias. The mediating role of behavioral biases was also confirmed; nearly half of the effect of financial technology on urban household expenditure patterns passes through mediating variables.
Conclusion: In urban economics, financial technology is not merely an efficiency-enhancing tool, but also a cognitive reshaping force that reconfigures digital choice architecture. Behavioral differences across urban areas highlight that urban policymaking in the FinTech era should be designed in accordance with the cognitive vulnerabilities of each area. It is recommended that future studies examine the generalizability of these findings through longitudinal designs and field experiments in intermediate cities and developing countries.
Introduction and Objective: The rapid expansion of financial technology within urban ecosystems has raised new questions regarding how this technology influences the economic behavior of citizens. The present study was conducted to explain the role of financial technology in urban economics through the lens of behavioral finance.
Methodology: This study was carried out using a qualitative-analytical approach and a systematic literature review. Based on the 2025 systematic review, 42 eligible studies were selected from معتبر international databases (Web of Science and Scopus) covering the period from 2024 to 2026. Data were analyzed using directed content analysis and conceptual mapping.
Findings: The results showed that financial technology affects urban economics through two channels: a direct channel (reducing transaction costs) and an indirect channel (activating behavioral biases). Three key behavioral biases—framing effect, algorithmic overconfidence, and herding behavior—were identified as the strongest indirect channels. In addition, a paradoxical reduction in loss aversion in the FinTech context was confirmed. Another important finding was the significant difference in behavioral patterns across urban areas: residents of central urban districts showed greater sensitivity to framing effects and herding behavior, whereas residents of peripheral areas were strongly influenced by anchoring bias. The mediating role of behavioral biases was also confirmed; nearly half of the effect of financial technology on urban household expenditure patterns passes through mediating variables.
Conclusion: In urban economics, financial technology is not merely an efficiency-enhancing tool, but also a cognitive reshaping force that reconfigures digital choice architecture. Behavioral differences across urban areas highlight that urban policymaking in the FinTech era should be designed in accordance with the cognitive vulnerabilities of each area. It is recommended that future studies examine the generalizability of these findings through longitudinal designs and field experiments in intermediate cities and developing countries.
Keywords: FinTech, urban economics, behavioral finance, herding behavior, digital choice architecture.
Type of Study: Applicable |
Subject:
Special
Received: 2026/06/1 | Accepted: 2026/03/30 | Published: 2026/03/30 | ePublished: 2026/03/30
Received: 2026/06/1 | Accepted: 2026/03/30 | Published: 2026/03/30 | ePublished: 2026/03/30
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