Stay Informed!

By Sean Luechtefeld on 08/12/2010 @ 06:22 PM

Tags: Innovation, Innovators, Behavioral Economics

Innovator-in-Residence Mindy Hernandez’s most recent blog post at Applying Behavioral Sciences in the Real World was published last week. This most recent Behavioral Economics research examines innovative ways to encourage people to save for their retirement, a practice that millions of Americans identify as important, but often fail to engage.

To read the full text of Mindy’s latest blog post, Feeling Connected to Your Inner Old Man, click here.

Mindy’s post highlights the findings of research conducted by researchers Ersner-Hershfield, Bailenson and Carstensen, who hypothesized that perhaps one of the reasons people don’t save for their retirement – even when they know they should – is that they can’t picture themselves as older individuals. To test their hypothesis, they used immersive virtual reality to generate avatars of participants that depicted them as older individuals. Participants then used the virtual reality software to “see” themselves as older and afterwards were given retirement savings surveys.

Their research found that those who had seen their “future selves” saved significantly more money for retirement (the mean saved by participants in the control group was about $75, whereas the mean saved by participants in the experimental group was about $175).

Of course, we don’t all have access to virtual reality software than can allow us to see ourselves as older. But, as Mindy points out, that’s exactly the challenge: how do we use these findings to inform the way we incent saving behavior? How might one’s ability to see themselves in the future impact the way they behave now? These questions aren’t just fascinating, but they get at the crux of Behavioral Economics research – how can we use these academic pursuits to inform financial decision making and the ways practitioners administer their programs?

I know, I know…lofty questions for a Thursday afternoon. Think about it this evening and share your thoughts below in the morning!

Comments

Leave a Comment

Email*

First Name*

Last Name

Title

Comment*

Formatting Help

You Type	You See
*italics*	italics
**bold**	bold
[ask google](http://google.com)	ask google
+ item 1 + item 2 + item 3	item 1 item 2 item 3
> a really cool quote from a nice person	a really cool quote from a nice person

Comment

* Required information

Preview