Suzzane Shu

Before Associate Professor of Marketing Suzanne Shu found her calling in academia, she had a career in industry. With undergraduate and advanced degrees in electrical engineering from Cornell University, Shu spent five years with Bell Communications Research. Earning an MBA was a logical part of her professional trajectory.

While in business school, Shu realized that the phenomena that had always interested her — behavioral economics, judgment and decision-making, consumer psychology — were organized into formal areas of study. The MBA experience changed her life, she says, and sealed her decision to pursue a Ph.D. at the University of Chicago, where she worked closely with renowned behavioral science expert Richard H. Thaler.

Shu has built a body of work on the topic of future bias, a previously unexplored behavior in which consumers delay consuming a positive asset until some future undefined date. “While most research on intertemporal choice has documented that consumers prefer sooner rewards over later ones,” she says, “my work is among the first to suggest that there may be circumstances where the opposite happens and consumers are willing to wait indefinitely to consume a reward.”

Shu’s numerous published papers address the psychological determinants around concepts like the endowment effect, whereby people ascribe higher value to things just because they own them; and the increasingly hot topic of decumulation, that is, spending savings, pension or other assets accumulated during one’s working life. She studies consumers’ behaviors around purchasing annuities — or, more precisely, why they might not. She says the prospect feels risky to many people, and possibly underlying that feeling is a certain mortality salience, or awareness of one’s inevitable death. “I find that seemingly peripheral psychological constructs, such as fairness or aesthetics, can have a large impact on consumer financial decisions,” says Shu.

“Teaching this material in a business school means students will take it out into the world and apply it,” says Shu, whose oft-cited experiments and collaboration have implications at the level of policy, attracting significant interest from government organizations, financial institutions, and public policy experts.

At a time when the retirement population is larger than ever and Americans are living much longer than in previous generations, Shu’s work also has immediate relevance to consumer financial decision-making. “Most people claim Social Security benefits too early to optimize their income during retirement,” says Shu, co-author of a study revealing important roles for loss aversion and feelings of ownership when making decisions about decumulation. “Why are people doing something that’s not in their economic self-interest? Some people think that they deserve from the system exactly the money they’ve paid into it. This is not really how Social Security works, but the more strongly people feel that benefits come from ‘their’ money contributed through their working years, the sooner they want to claim it, even though it may leave them worse off.”