Using Age-Progression Virtual Reality as an Incentive to Save

The Wall Street Journal recently published an article by Maddy Dychtwald, co-founder of Age Wave, on using virtual reality (VR) to help folks save. How Virtual Reality Can Boost Retirement Savings reports on a project and explains how it unfolded

Professor Hal Hershfield of UCLA’s Anderson School of Management partnered with Daniel Goldstein of Microsoft Research, Jeremy Bailenson, director of Stanford’s Virtual Human Interaction Lab, and several other Stanford researchers to see if connecting people with their future selves could affect their willingness to save for that future self. They took photos of college-age research subjects and digitally altered half of them to create virtual avatars at age 65—complete with jowls, bags under the eyes, and gray hair.

Why don’t people do a better job of saving for retirement? According to the article, experts think it’s psychological to some extent. “When you’re in your 20s and 30s, you can’t even imagine your life at 65 or 95. If you can’t imagine it, chances are you’re not planning for it.”

Back tot he project.  Digitally aging the participants wasn’t the end of the project. Next the participants were provided with “goggles and sensors and were dropped into virtual reality, where they faced a mirror reflecting either their current self or their future self. As part of the experiment, they were each given $1,000 to spend. They could either buy a gift for someone special, invest in retirement, plan a fun event, or put money into a checking account.”

This is getting intriguing. Want to bet what happened? According to the article, “[t]hose research …  greeted by their aged avatar put more than twice as much money toward retirement as those who saw their contemporaneous selves.” The researchers, to double check the results, also showed “some research participants … the aged avatars of other test subjects to see if that impacted their choices. It didn’t. Only those who saw themselves at retirement age were likely to invest in their future.” 

The  WSJ article explains that VR tools are under development “to offer experiential solutions to our nation’s lack of retirement planning… [and] provide a visceral experience that might even immerse [the user] in several different future scenarios, so [the user] can experience, for instance, what it’s like to live with limited funds at 65, 75 or 80.”

The article about the study, Increasing Saving Behavior Through Age-Progressed Renderings of the Future Self, is available here.

This is the abstract from the research study article:

Many people fail to save what they need to for retirement (Munnell, Webb, and Golub-Sass 2009). Research on excessive discounting of the future suggests that removing the lure of immediate rewards by pre-committing to decisions, or elaborating the value of future rewards can both make decisions more future-oriented. In this article, we explore a third and complementary route, one that deals not with present and future rewards, but with present and future selves. In line with thinkers who have suggested that people may fail, through a lack of belief or imagination, to identify with their future selves (Parfit 1971Schelling 1984), we propose that allowing people to interact with age-progressed renderings of themselves will cause them to allocate more resources toward the future. In four studies, participants interacted with realistic computer renderings of their future selves using immersive virtual reality hardware and interactive decision aids. In all cases, those who interacted with virtual future selves exhibited an increased tendency to accept later monetary rewards over immediate ones.

Wow, just wow.  Now, can we get these for our students?