Yahoo India presents Big Thinkers Series : Talk on Technologies for Ensuring Secure Financial Futures by Dan Goldstein from London Business School and Yahoo Research
Monday August 23, 2010 , 3 min Read
The Yahoo! Big Thinkers India Series is a well-established quarterly lecture series on topics ranging from science, technology and the Internet.
Conceived in 2007, this lecture series is a unique knowledge sharing platform created by Yahoo! for academia, scientists, technologists, media and the corporate world. The speakers are globally acclaimed subject matter experts from the Yahoo! Research team. They bring with them the expertise and global perspective of the constantly changing world of technology, online products and communities and the Internet space in general.The speakers focus on data driven analysis, high quality research, algorithms and economic models. We welcome you to leverage this opportunity to interact with some of the biggest brains in today’s world.
Dan Goldstein is Principal Research Scientist at Yahoo! Research and Assistant Professor of Marketing at London Business School. His areas of research include decision making, consumer behavior, and behavioral economics. Dan’s research has appeared in journals from Science to Psychological Review and been featured by The Financial Times, The New York Times, ESPN, Time and The Washington Post, as well as in books such as Malcolm Gladwell's Blink and Nassim Taleb's The Black Swan. He received his undergraduate degree in Computer Science from the University of Wisconsin, his PhD in Psychology at the University of Chicago, and he has taught or researched at Columbia University, Harvard University, Stanford University and the Max Planck Institute in Germany, where he was awarded the Otto Hahn Medal in 1997.
Abstract
Investing and saving for the future is one of the most consequential yet daunting financial decisions that individuals face. Despite the rapid growth in world financial markets and the impressive ability of IT systems to process masses of data, little technological progress has been made on improving people's financial decisions. How can technology work together with human psychology to lead to more secure financial futures?
In this talk, I present several experimental findings and technologies that have the promise of changing the way investment decisions are made. The central idea is to create decision environments that simulate future outcomes, and to have people make decisions with their eyes on the future. The main technical contribution is the Distribution Builder, a tool to both aid and understand people as they construct preferences for wealth in the future. The method enables people to build desired probability distributions of income constrained by market forces and the amount invested. In an online experiment, such probability distributions were collected from a sample of working adults, and the data were used to demonstrate reliability and predictive validity, characterize individual and cluster-level differences, as well as estimate parameters of risk aversion and loss aversion. I provide examples from other studies and technologies, all of which demonstrate how a focus on outcomes can lead to more comfortable financial future.
