The financial decisions you make today will affect you for the rest of your life. So what if you could get a little insight into just how those decisions might affect future you? That’s what Dan Goldstein, principal researcher with Microsoft Research, is doing. We sat down with Dan to figure out how he is helping people and companies make better decisions with the help of virtual reality technology.
Can you explain what it is you do?
I’m a principal researcher at Microsoft Research, which basically means I’m a professor. Microsoft Research is like a university without the students. So we have a lot of PhDs and a lot of former professors here that are doing basic research on interesting topics. The field I’m interested in is economic behavior and I answer questions about people’s economic behavior using techniques and tools from computer science—my academic background. In particular I have found that virtual reality has real promise for understanding and shaping people’s economic decision-making on a personal level.
You have a degree in computer science but went back to school for psychology?
Yep. I have degrees in computer science and experimental psychology.
Did computer science lead you to psychology or is that something you’ve always been interested in?
I guess I’ve always been interested in both. My father was an experimental psychologist and I kind of grew up using computers so I thought the best way to study behavior and create tools that influence behavior is to use computer technology.
I was surprised that virtual reality technology has applications in finance. When you started researching VR technology did you think it would have as big as an effect on you and your research?
I was thinking about saving and retirement for some time. I was working with William Sharp, who is a Nobel Laureate whom I met when I was visiting Stanford University. He put me in touch with Hal Hershfield, who’s my coauthor on the paper about using VR. He had been thinking a lot about using VR to help people think about the future and I had been creating these electronic decision calculators to help people think about their future finances. So we just put them together and thought “Oh, we could take what you’re doing and what I’m doing and put them together into a VR system to help people think about their future finances.” That’s how
it was born.
What’s neat about VR is it can take the way something is now and change it in a certain way. So, in particular, what we do is take the present and we use VR to show what the future might be like based on the present. For instance, based on how you look right now, we can use VR software to determine how you’ll look 30, 40 years in the future.
Now why this is interesting for economics is that a lot of economic decisions involve making tradeoffs between doing things now and doing things in the future. Saving is a classic example of this.You can spend money now, in which case you’re not going to have money to spend in the future, or you can save money now, in which case you will have money to spend in the future. The problem, while we know this, is it’s really hard to think about how our actions today will affect ourselves in the future.