Time Perception and Retirement Saving: Lessons from Behavioral Decision Research
20 Pages Posted: 14 Nov 2010
Date Written: November 11, 2010
This chapter provides a behavioral decision perspective on the implications of intertemporal choice research for retirement savings. In particular, we focus on two cognitive mechanisms explaining how and why future monetary outcomes are discounted: (1) changes in the perception of delayed outcomes due to changes in mental representations and perceived slack, and (2) changes in the perception of temporal distance to delayed outcomes. Relevant recent findings are reviewed and the implications for retirement savings are discussed.
Keywords: future, saving, retirement, temporal, behavioral, income, discount
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