Policy Analysis of Individual Financial Planning Affected by Personal Bias Factors in Indonesia

Even in making individual financial decisions, humans will naturally still be affected by personal biases which leads to less than optimal, illogical, and irrational decisions. It will be an important issue due to individual financial decisions which accumulate as a whole country's economic performance. This research introduces the idea to combine personal biases stated in behavioral economic theory with individual financial decision models using a system dynamics approach. The research uses vignette a fractional factorial studies method to calculate the score of personal bias factors. The main findings of the research show that there is a positive feedback loop on individual financial planning which is influenced by personal biases. The research concludes that personal bias factors such as the hedonic editing effect, future spending, category budgeting, endowment effect, and house-money effects are important factors in individual financial planning. Thus, paying attention to these personal biases then may help policy maker to control saving, spending, and investment rates in Indonesia.

Social Hedonic Editing: People Prefer to Experience Events at the Same Time as Others

Previous research testing the hedonic editing hypothesis examined preferences for the timing of events that happen to the self—asking, for example, whether people prefer to experience two positive or two negative events on the same or different day(s). Here, we examine preferences for the timing of events that happen to the self and to others— social hedonic editing. Across five studies ( N = 2,522), we find people prefer to experience a positive or negative event on the same day that (vs. a different day than) another person experiences a similar positive or negative event. Studies 1 and 2 document this “preference for integration” in interpersonal (i.e., for the self and others) but not intrapersonal (i.e., for the self) contexts, Studies 3 and 4 suggest people prefer integration because it increases interpersonal connection, and Study 5 highlights a boundary condition. People do not prefer integration for very emotionally impactful events.

How Mobile App Design Impacts User Responses to Mixed Self-Tracking Outcomes: Randomized Online Experiment to Explore the Role of Spatial Distance for Hedonic Editing (Preprint)

BACKGROUND Goal setting is among the most common behavioral change techniques employed in contemporary self-tracking apps. For these techniques to be effective, it is relevant to understand how the visual presentation of goal-related outcomes employed in the app design affects users’ responses to their self-tracking outcomes. OBJECTIVE This study examined whether a spatially close (vs distant) presentation of mixed positive and negative self-tracking outcomes from multiple domains (ie, activity, diet) on a digital device’s screen can provide users the opportunity to hedonically edit their self-tracking outcome profile (ie, to view their mixed self-tracking outcomes in the most positive light). Further, this study examined how the opportunity to hedonically edit one’s self-tracking outcome profile relates to users’ future health behavior intentions. METHODS To assess users’ responses to a spatially close (vs distant) presentation of a mixed-gain (vs mixed-loss) self-tracking outcome profile, a randomized 2×2 between-subjects online experiment with a final sample of 397 participants (mean age 27.4, SD 7.2 years; 71.5%, 284/397 female) was conducted in Germany. The experiment started with a cover story about a fictitious self-tracking app. Thereafter, participants saw one of four manipulated self-tracking outcome profiles. Variables of interest measured were health behavior intentions, compensatory health beliefs, health motivation, and recall of the outcome profile. We analyzed data using chi-square tests (SPSS version 23) and moderated mediation analyses with the PROCESS macro 2.16.1. RESULTS Spatial distance facilitated hedonic editing, which was indicated by systematic memory biases in users’ recall of positive and negative self-tracking outcomes. In the case of a mixed-gain outcome profile, a spatially close (vs distant) presentation tended to increase the underestimation of the negative outcome (P=.06). In the case of a mixed-loss outcome profile, a spatially distant (vs close) presentation facilitated the exact recognition of the positive outcome (P=.04). When the presentation of self-tracking outcomes provided the opportunity for hedonic editing, users with a low (vs high) health motivation produced compensatory health beliefs, which led to lower health behavior intentions (index of moderated mediation=0.0352, 95% CI 0.0011-0.0923). CONCLUSIONS When spatial distance between the presentations of mixed self-tracking outcomes provided the opportunity to hedonically edit one’s self-tracking outcome profile, users recalled their self-tracking outcomes in a more positive light. Especially for users with lower health motivation, the opportunity to hedonically edit one’s mixed self-tracking outcome profile led to reduced health behavior intentions. To prevent the occurrence of hedonic editing in users’ responses to visually presented self-tracking outcome profiles, further research is necessary to determine the ideal distance that should be employed in the app design for the presentation of mixed self-tracking outcomes on a digital device’s screen.