Abstract
Social cues, such as being watched, can subtly alter fund investment choices. This study aimed to investigate how cues of being watched influence decision-making, attention allocation, and risk tendencies. Using decision scenarios adopted from the “Asian Disease Problem,” we examined participants’ risk tendency in a financial scenario when they were watched. A total of 63 older and 66 younger adults participated. Eye tracking was used to reveal the decision-maker’s attention allocation (fixations and dwell time per word). The results found that both younger and older adults tend to seek risk in the loss frame than in the gain frame (i.e., framing effect). Watching eyes tended to escalate reckless gambling behaviors among older adults, which led them to maintain their share in the depressed fund market, regardless of whether the options were gain or loss framed. The eye-tracking results revealed that older adults gave less attention to the sure option in the eye condition (i.e., fewer fixations and shorter dwell time). However, their attention was maintained on the gamble options. In comparison, images of “watching eyes” did not influence the risk seeking of younger adults but decreased their framing effect. Being watched can affect financial risk preference in decision-making. The exploration of the contextual sensitivity of being watched provides us with insight into developing decision aids to promote rational financial decision-making, such as human-robot interactions. Future research on age differences still requires further replication.
Highlights
In our society, older adults face many complicated decisions about financial investment and retirement choices
We examined the framing effect and risk tendency when being watched combined with a gain/loss frame
Our results showed that cues of being watched, which are irrelevant to the present task, decreased the processing of the sure option, but the attention given to the gamble option was maintained
Summary
Older adults face many complicated decisions about financial investment and retirement choices. Older people make up the vast majority of fraud victims, which makes them targets of financial abuse (Lichtenberg et al, 2016). Behavioral economics research has found that older adults tend to rely more on heuristic processing than younger adults, which hints that older adults are more likely to show framing effects (Kim et al, 2005; Cooper et al, 2017). The presence of others can subtly alter investment choices. Heightened compliance, a sense of being monitored, and increasing reward sensitivity in decision-making when social cues are present could explain the boosted risk-seeking tendency to gain profits (Haley and Fessler, 2005; Weigard et al, 2014; Bittner and Kulesz, 2015).
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