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Abstract
World life expectancy is increasing and many populations will begin to age rapidly. The impeding prevalence of a greater number of older people living longer lives will have significant social and economic implications. It is important to understand how older people make economic and social decisions. Aging can be associated with a “phenomenon of decline” and also greater wisdom. This paper seeks to examine the relationship between wisdom and aging. It reviews and connects the behavioral sciences and neuroscience literature on age differences in the following social and economic decision making domains that represent subcomponents of wisdom: (1) prosocial behavior in experimental economic games and competitive situations; (2) resolving social conflicts; (3) emotional homeostasis; (4) self-reflection; (5) dealing effectively with uncertainty in the domains of risk, ambiguity and intertemporal choice. Overall, we find a lack of research into how older people make economic and social decisions. There is, however, some evidence that older adults outperform young adults on certain subcomponents of wisdom, but the exact relationship between old age and each subcomponent remains unclear. A better understanding of these relationships holds the potential to alleviate a wide range of mental health problems, and has broad implications for social policies aimed at the elderly.
Highlights
Of income do if her social security check does not come in 1 month?’’ (Heidrich and Denney, 1994)
Summary Taken together, these studies revealed that age-related changes in economic decisions involving risk, ambiguity, and intertemporal choices are determined by task characteristics, the specific age range, and a variety of other methodological factors (Frederick et al, 2002; Mata et al, 2011)
A number of studies, especially in the neurosciences, used small sample sizes, which undermines the reliability of the findings due to a lack of statistical power (Button et al, 2013)
Summary
World life expectancy has been steadily rising in the past two centuries and is expected to continue increasing for the foreseeable future (Oeppen and Vaupel, 2002). Based on a steady increase of almost 3 months of life per year, it may not be uncommon for those born since 2000 in certain developed countries, such as USA, the UK, Japan and other western European countries, to live for 100 years (Christensen et al, 2009; Vaupel, 2010). This is astonishing given that the average life expectancy in developed countries was under 45 years in 1900 (Juvin, 2010). There are serious economic and social implications of our increasing longevity and rapidly aging population (Schneider and Guralnik, 1990; Lloyd-Sherlock, 2000; Tinker, 2002; Poterba, 2004; Bloom et al, 2010b; see Bloom et al, 2010a)
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