People often fail to save adequately for the future and are left to suffer from poverty in retirement. A stream of research suggests that myopic financial behaviour is partly caused through a lack of perceived psychological connectedness to the future self. Drawing on theories of personal identity, mental imagery and vividness that suggest that people fail to identify with their future self due to a lack of vividness, I propose that enhancing participants imagination of their future selves through Augmented Reality (AR) cultivates future-oriented decisions across four financial decision-making tasks1. Specifically, I assume that the positive impact of AR use on future-oriented financial decision-making is rooted in a sequential mediation process of increased perceived vividness and connectedness. Based on the argument that people often fail to consider the consequences of their decisions, I further investigate the role of opportunity costs as a boundary condition for connectedness to influence financial decision-making. In an online experiment, I empirically demonstrate that augmenting the imagination of people’s future selves through AR (vs. mere thinking) decreases how much money people allocate to the future through sequentially decreasing perceived vividness and connectedness. Besides, the results reveal that this effect does not depend on whether opportunity costs are primed or not. Finally, I highlight the thesis’ limitations and offer potential explanations for the counterintuitive results, which may serve as a starting point for future research by other scientists.

Netspar, Network for Studies on Pensions, Aging and Retirement, is een denktank en kennisnetwerk. Netspar is gericht op een goed geïnformeerd pensioendebat.


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