Behavioral Economics

The Vividness of Your Future Self: Virtual Reality and Savings

Awarded External Scholars

Hal Ersner-Herschfield

Stanford University

Project Date:

December 2008

Award Amount:

$5,000

Summary

Objective:

To test the theory that if people can more vividly imagine their future, older selves, they will be motivated to save more money for retirement.

In four studies, participants interacted with digitally aged images of themselves using immersive virtual reality hardware before making decisions about whether to consume in the present or the future.

Key Findings:

Participants who interacted with an "old" version of themselves in a virtual reality environment allocated more than twice as much money to their hypothetical retirement account as those in the control group.
Participants used a computer program to allocate a percentage of their salary for retirement. Those participants who saw an “aged” photo of themselves during this exercised saved more than those in the control group