The Illusion of Wealth and Its Reversal

Dan Goldstein, Microsoft Research
Hal Hershfield, University of California Los Angeles, USA
Shlomo Benartzi , University of California Los Angeles, USA
Do people exhibit an “illusion of wealth” by which lump sums at retirement ($100,000) seem larger than monthly equivalents ($500 per month for life)? In four experiments, we obtain this basic effect and draw on Decision-by-Sampling theory to show a reversal at higher amounts.
[ to cite ]:
Dan Goldstein, Hal Hershfield, and Shlomo Benartzi (2015) ,"The Illusion of Wealth and Its Reversal", in NA - Advances in Consumer Research Volume 43, eds. Kristin Diehl and Carolyn Yoon, Duluth, MN : Association for Consumer Research, Pages: 136-141.