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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.
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Opinions and conclusions are solely those of the author(s) and do not reflect views of the institutions supporting the research, with whom the authors are affiliated, or the Pension Research Council. Copyright 2010 © Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.
Date Posted: 07 August 2019