401K Choice Architecture Gone Awry?

One of the most popular examples of choice architecture – how our decisions are influenced by the way options are presented – is the 401K enrollment process. (For non-US Neuromarketing readers, most companies have replaced traditional pension plans with 401K plans. Employees have the option to contribute to an account, the employer matches some or all of the employee’s contributions, and over time the money accumulates. The money belongs to the employee and can be withdrawn at time of retirement, or earlier with penalties.) […]

By |July 8th, 2011|

Fight Impulse, Imagine the Future

Many of the decisions we make are guided by some kind of reward. Do I go through the McDonalds drive-thru window and get a burger and fries that will light my brain up like a Christmas tree, or do I delay eating until my planned meal-time and consume something healthy? Do I put part of my salary into my employer’s 401K retirement plan, or do I take the cash in my paycheck now? Do I buy the expensive camera at the retail store that I’m in, or perhaps save a portion of the price by shopping around at other stores or online? All of these decisions create a tension in our brains between a current reward and a future reward of (potentially) greater magnitude. While the brain tends to favor immediate gratification (see The Time Value of Bananas), new research shows that vividly imagining the future can help individuals make better, more future-oriented decisions. […]

By |April 22nd, 2010|