Effects of Age on Risky and Intertemporal Choices: Decision Strategies and Real-World Implications

Abstract

Although increased lifespan is a signature of improved human development, an aging population also carries serious societal implications, many of which stem from decisions made by older adults. Among the diverse scenarios encountered by older adults, two types of decisions are particularly critical: risky choice and intertemporal choice (reward choices made across time). These choices, while undoubtably critical for later-life personal finance and health, have not always exhibited a consistent pattern with age. We attempt to reconcile these apparent inconsistencies in age-related decision performance. We review changes in decision-making strategies, as well as the role that emotion may play in governing such age-related changes. We also examine how the findings of laboratory-controlled studies have been, or could be, extended to real-world decisions made by older consumers. We then discuss the everyday implications of older adults’ risky and intertemporal choices as well as some possible routes for interventions by which we might best support adaptive decision-making across the lifespan. Finally, we address the corpus of cognitive neuroscience research in the last two decades that has begun to evince the neural correlates and mechanisms underlying an array of decisions, as well as the effects of healthy aging on the brain.

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