Most people choose near-term payoffs over distant benefits, often leading to poor outcomes when the future arrives.

Many individuals have difficulty envisioning a personal future because a distant time horizon is more abstract than the tangible reality of an extended present.
This bias toward short-term rewards generally leads to inadequate planning for future eventualities, like health care and financial requirements.

However, making the intangible future more concrete alters this near-term preference.

Volunteers received a visual aid to clearly imagining a future self by viewing a current photo of themselves or a digitally-aged photo from the same present-day view in a study by NYU’s Hal Hershfield collaborating with Daniel Goldstein of London Business School, Stanford’s  William F. Sharpe, Laura Carstensen, Jeremy Bailenson, and Leo Yeykelis plus Jesse Fox of Ohio State University.

The team asked participants in each group to estimate the amount of their income they would save for retirement.
People who saw their aged photos said they would save substantially more money than those who saw the present-day image.

When participants interacted with realistic, immersive age-progressed renderings of themselves, they tended to defer present rewards for future monetary rewards.

Hershfield and collaborators argued that the aged photos are vivid, less-deniable glimpses of a personal future.
These images enabled people to more realistically imagine their distant future lives by enhancing their experience of “self-continuity” over time.

Financial planners, health care advisors, and life insurers have applied these findings by developing a commercial version of this future self-image, to enable people to develop more realistic savings and retirement strategies for a tangible future self.

Another team’s findings supported Hershfield’s suggestion that people view their future selves as “other” and alien rather than personally relevant and meaningful.

Princeton’s Emily Pronin, Christopher Olivola, now of University of Warwick and Kathleen Kennedy, now of Columbia, asked participants to estimate the amount of an unsavory liquid mixture they would be willing to drink immediately and in several months to advance scientific knowledge.
In addition, volunteers estimated the amount of this liquid that another participant should drink.

Most volunteers judged that they would drink more in the future and that others should drink about the same amount.
However, participants estimated that they would drink only about half as much if consumed immediately.

This suggests that judgments about the future self and unknown other people are similarly distant from the present self.

These time perception biases include:

• Quasi-hyperbolic time discounting, which leads most people to make an inter-temporal choice for a smaller payoff in the present instead of a larger payoff in the future.
  They attributed this trend to discounting a less-imaginable future payoff for a more tangible, nearer-term benefit.
• Affective forecasting errors, described in a previous blog post, leading to inaccurate predictions of future choices, preferences, emotional reactions, and behaviors due to:
  • Projection bias — Assuming that a present state will occur at a future time in a different circumstance,
  • Impact bias — Overestimating future emotional responses to adverse events, and underestimating adaptability and coping,
  • Narrow bracketing — Considering individual decisions and outcomes without reference to context or long-term additive effects with other decisions and circumstances.

-*How do you overcome biases to plan for future goals and needs?

RELATED POSTS:

• Reduce “Affective Forecasting” Errors with a Geographic Cure?
• Biased Time Perception – Mind Time, Clock Time, and Einstein

Twitter:  @kathrynwelds
Blog: – Kathryn Welds | Curated Research and Commentary
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