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Aging and decision making: A comparison between neurologically healthy elderly and young individuals

Kovalchik, Stephanie and Camerer, Colin F. and Grether, David M. and Plott, Charles R. and Allman, John M. (2003) Aging and decision making: A comparison between neurologically healthy elderly and young individuals. Social Science Working Paper, 1180. California Institute of Technology , Pasadena, CA. (Unpublished)

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We report the results of experiments on economic decisions with two populations, one of healthy elderly individuals (average age 82) and one of younger students (average age 20). We examine confidence, decisions under uncertainty, differences between willingness to pay and willingness to accept and the theory of mind (strategic thinking). Our findings indicate that the older adults’ decision behavior is similar to that of young adults, contrary to the notion that economic decision making is impaired with age. Choices over lotteries do not reflect the age differences previously reported in the psychology and biology literature. Moreover, some of the demonstrated decision behaviors suggest that the elderly individuals are less biased than the younger individuals.(1)There is a greater prevalence of overconfident behavior in the younger population. (2) Our results show no significant support for a theory of an endowment effect in either population. (3) Both populations perform similarly on the beauty contest task, although there is a modest indication of a higher incidence of confused behavior by the older.

Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription ItemPublished Version
Camerer, Colin F.0000-0003-4049-1871
Additional Information:We thank Dr. Gail Murdock and Dr. Linda Clark, from the ADRC, who coordinated the recruitment of the older population and provided demographic data for these subjects. We also thank Kathy Zeiler for her assistance with the loss aversion methodology, as well as Neda Afsarmanesh for her involvement in the questionnaire design. The financial support of the National Science Foundation, the Summer Undergraduate Research Fellowship at the California Institute of Technology, the Arthur R. Adams Fellowship, and the David and Lucile Packard Foundation are gratefully acknowledged. For their reading of and helpful responses to early versions of our paper, we thank Dr. John Conlisk and our article’s anonymous referee. 14
Group:Social Science Working Papers
Funding AgencyGrant Number
Caltech Summer Undergraduate Research Fellowship (SURF)UNSPECIFIED
Arthur R. Adams FellowshipUNSPECIFIED
David and Lucile Packard FoundationUNSPECIFIED
Subject Keywords:Age, overconfidence, willingness to pay/accept, endowment effect, theory of mind, game theory, risk-taking
Series Name:Social Science Working Paper
Issue or Number:1180
Classification Code:JEL: D00, D80, D81
Record Number:CaltechAUTHORS:20171103-153904140
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82955
Deposited By: Jacquelyn Bussone
Deposited On:06 Nov 2017 21:58
Last Modified:03 Oct 2019 19:00

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