Work

Differential focus on probability and losses between young and older adults in risky decision-making

Year: 2019

Type: article

Abstract: We examined young and older adults' use of descriptive information about risk (i.e., probability and expected value) in financial decision-making. In Experiment 1, participants chose between lotteries in pairs of bets that offered either two risky gains or one risky gain and one sure gain. Whereas they showed a strong and indiscriminate preference for high-probability gambles in risky-risky pairs, they selected sure options at high rates and risky options at low rates in risky-sure pairs, with slightly stronger effects in older relative to young adults due to age differences in ability. Experiment 2 involved the same task but in terms of losses. Participants, especially older adults, preferred low-probability gambles not accounted for by age differences in ability. Results suggest minimal consideration of expected value and a strong focus on probabilities in decision-making. They also suggest that cognitive ability and chronic goals differentially influence age effects depending on risk context.

Source: Aging Neuropsychology and Cognition

DOI: 10.1080/13825585.2019.1642442

Authors: Erica L. O’Brien, Thomas M. Hess

Institution: North Carolina State University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: National Institute on Aging

Awards: Social Cognition and Aging, G4742660617, Psychosocial Determinants and Biological Pathways to Healthy Aging (Pathways)