Featured Research

from universities, journals, and other organizations

How the connection to the future self impacts financial decision-making

Date:
July 12, 2011
Source:
Columbia Business School
Summary:
A new study reveals how consumers feeling or not feeling connected to their future selves impacts their spending and savings decisions. Researchers conducted a series of experiments, manipulating the degree to which subjects felt connected to their future selves.

The June 2011 edition of the Journal of Consumer Researchfeatures research from Professor Daniel Bartels, marketing professor at Columbia Business School, and Oleg Urminsky, marketing professor at The University of Chicago Booth School of Business, that depicts how consumers feeling or not feeling connected to their future selves impacts their spending and savings decisions. The researchers conducted a series of experiments, manipulating the degree to which subjects felt connected to their future selves.

Related Articles


When discontinuity with the future self is anticipated, people behave more impatiently -- speeding up the consumption of utility (in this case, gift cards) -- than when connectedness to the future self is expected. The research which examines how people weigh smaller, immediate rewards against larger, long-term rewards, is part of a growing area of study in psychology on intertemporal trade-offs.

In the first study, the researchers asked a group of college seniors -- three weeks before graduation -- to read a passage that described college graduation either as an event that would prompt a major change in their identities or as an event that would prompt only a relatively trivial change. Compared to students who read the passage describing graduation as a small change, those who read a description of the event as a major change were much more likely to make more impatient choices, choosing to receive a gift certificate worth $120 in the next week rather than wait a year for up to $240.

In a subsequent study, the authors asked people to evaluate their sense of connectedness and similarity to their future selves. Three weeks later, they were asked them to choose between smaller gift cards they could use right away or larger gift cards that would require waiting. "Those who had felt more connected to their future selves then made more patient choices and were more willing to wait for a higher-valued gift card," Professor Urminsky explained.

Professor Bartels discussed the significance of the study. "Our work suggests that you can motivate people to hold onto their money, or make other, more prudent decisions by increasing their sense of connectedness to their future selves. Rather than trying to guilt ourselves into making prudent financial choices or creating complicated incentive schemes, we can instead look for simple, straightforward ways to foster our sense that what matters most will be preserved in our future selves, so that we can achieve goals that are important."


Story Source:

The above story is based on materials provided by Columbia Business School. Note: Materials may be edited for content and length.


Cite This Page:

Columbia Business School. "How the connection to the future self impacts financial decision-making." ScienceDaily. ScienceDaily, 12 July 2011. <www.sciencedaily.com/releases/2011/07/110712143004.htm>.
Columbia Business School. (2011, July 12). How the connection to the future self impacts financial decision-making. ScienceDaily. Retrieved November 27, 2014 from www.sciencedaily.com/releases/2011/07/110712143004.htm
Columbia Business School. "How the connection to the future self impacts financial decision-making." ScienceDaily. www.sciencedaily.com/releases/2011/07/110712143004.htm (accessed November 27, 2014).

Share This


More From ScienceDaily



More Science & Society News

Thursday, November 27, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

EU Pushes Google For Worldwide Right To Be Forgotten

EU Pushes Google For Worldwide Right To Be Forgotten

Newsy (Nov. 27, 2014) Privacy regulators recommend Google expand its requested removals to apply to all its web domains. Video provided by Newsy
Powered by NewsLook.com
Who Will Failed Nuclear Talks Hurt Most?

Who Will Failed Nuclear Talks Hurt Most?

Reuters - Business Video Online (Nov. 25, 2014) With no immediate prospect of sanctions relief for Iran, and no solid progress in negotiations with the West over the country's nuclear programme, Ciara Lee asks why talks have still not produced results and what a resolution would mean for both parties. Video provided by Reuters
Powered by NewsLook.com
FCC Forces T-Mobile To Alert Customers Of Data Throttling

FCC Forces T-Mobile To Alert Customers Of Data Throttling

Newsy (Nov. 25, 2014) T-Mobile and the FCC have reached an agreement requiring the company to alert customers when it throttles their data speeds. Video provided by Newsy
Powered by NewsLook.com
From Popcorn To Vending Snacks: FDA Ups Calorie Count Rules

From Popcorn To Vending Snacks: FDA Ups Calorie Count Rules

Newsy (Nov. 25, 2014) The US FDA is announcing new calorie rules on Tuesday that will require everywhere from theaters to vending machines to include calorie counts. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins