To the extent that people can feel more connected to a vividly imagined future self, they should be motivated to save money in a long-term domain. Accordingly, in the first year of this CADMA funded project, researchers designed the software and conducted an experiment to examine the association between a vivid perception of one’s self in the future and the propensity to save more for retirement. A novel technology, immersive virtual reality (VR), was developed to make one’s perception of one’s future self more realistic.
With regard to retirement planning, people fail to save what they need to. Economists believe that shortcomings in this domain are related to temporal discounting, or the tendency to value rewards that will occur in the future less than rewards that occur in the present. One of the reasons why such discounting occurs is because people may often have a difficult time vividly imagining future wants and desires. To the extent that people can more vividly imagine how badly they will feel in the future with little to no retirement savings, they should be motivated to save more money now. In this between-subjects study, the investigators use immersive virtual reality (VR) to help subjects vividly envision themselves in the present (control condition) or in the future (experimental condition).