Choosing for you: Diminished self-other discrepancies in financial decisions under risk in the elderly.

Abstract

Many older adults hold powerful positions in governments and corporate boards throughout the world. Accordingly, older adults often have to make important financial decisions on behalf of others under risk. Although it is common to observe younger adults taking more risks when making financial decisions for others, it is unclear if older adults exhibit the same self-other discrepancies. Here, we conducted 2 studies (88 and 124 participants, respectively) to examine self-other discrepancies in financial decision making under risk in older adults. We focused on 3 aspects of financial decision making: loss aversion (a tendency to weight potential losses more strongly than potential gains), risk-aversion asymmetry (a tendency to be risk-averse for potential gains and risk-seeking for potential losses), and risk preferences separately in gain and loss domains. Using computational modeling and behavioral economics tasks, we found weaker self-other discrepancies in older adults (compared with younger adults) across all 3 aspects. We also replicated the age differences in self-other discrepancies in loss aversion across 2 largely nonoverlapping cohorts. Thus, it appears that when making financial decisions on behalf of others, older adults, relative to younger adults, have a stronger disposition to regard others' financial outcomes as important as their own. (PsycINFO Database Record