To Know and to Care: How Awareness and Valuation of the Future Jointly Shape Consumer Spending
69 Pages Posted: 23 Aug 2015 Last revised: 17 Feb 2016
Date Written: January 1, 2014
Reducing spending in the present requires the combination of being both motivated to provide for one’s future self (valuing the future) and actively considering long-term implications of one’s choices (awareness of the future). Feeling more connected to the future self — thinking that the important psychological properties that define your current self are preserved in the person you will be in the future — helps motivate consumers to make far-sighted choices by changing their valuation of future outcomes (e.g., discount factors). However, this change only reduces spending when opportunity costs are considered. Correspondingly, cues that highlight opportunity costs reduce spending primarily when people discount the future less or are more connected to their future selves. Implications for the efficacy of behavioral interventions and for research on time discounting are discussed.
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