The world population gets older as life expectancy increases. The popula-tion of people over the age of 60 is expected to be over two billion in 2050 (cf. United Nations, 2017, pp. 13-14). Older adults (OA) still face decisions, which might be even more significant or complex than decisions of young-er adolescents. For example, the average age of C-suite members in Ameri-can firms is 54 (cf. Korn Ferry, 2007). On a more individual level, the pop-ulation aged 55 and higher has a significantly higher mean net worth than the younger population (cf. Bricker et al., 2017, p. 13). Especially, if one accounts for the fact that research has shown that declines in cognitive functioning are seen before the age of 50 (cf. Salthouse, 2004, p. 141), re-search on aging and decision making (DM) is of high importance.
In recent years numerous papers on this topic were published. This thesis helps existing literature by creating a literature overview to summarize current findings. Because of the reasons above, this thesis concentrates on age-related differences between young and OA, but does not analyze re-search about DM in childhood. It adds to current literature by being the first work with an extensive overview of age-related changes in the respective analyzed biases with a short subsequent view on financial DM.
The thesis deals with the research question, whether biases of DM literature differ between younger and OA. To answer this question, I examine differ-ences in typical DM biases. The chosen biases are the ones being investi-gated the most thoroughly in existing literature on aging and DM and wherever possible or necessary I will focus on DM in economic contexts.
The remainder of this paper is organized as follows: section two gives a short overview about the foundations of DM. After examining age-related effects on processes, which underly DM, in chapter three, the fourth chapter deals with age-related differences in DM. Afterwards, I shine a light on potential implications resulting from respective age differences. Chapter six concludes.
Table of Contents
1 Introduction
2 Overview on Decision Making
2.1 Introduction to Decision Making
2.2 Common Biases in Decision Making
2.3 Mental Processes in Decision Making
3 Implications of Aging
3.1 Age-related Effects on Deliberative Processes
3.2 Age-related Effects on Experiential Processes
3.3 Development of Interaction between Deliberative and Experiential Processes
4 Age-related Differences in Decision Making
4.1 Negativity Bias
4.2 Framing Bias
4.3 Sunk Cost Fallacy
4.4 Priming Effect
4.5 Overconfidence Bias
4.6 Non-Bias Related Differences
5 Implications of Age Differences in Decision Making
6 Conclusion
Research Objectives and Core Themes
This master's thesis examines the impact of aging on decision-making (DM) processes, specifically investigating whether DM biases differ between younger adults and older adults (OA). The research aims to synthesize existing literature to understand how cognitive changes over the lifespan influence decision-making performance, focusing on the interplay between deliberative and experiential systems.
- Analysis of age-related cognitive decline and its impact on deliberative processes.
- Evaluation of the development of the experiential system and expertise with age.
- Examination of specific decision-making biases including negativity bias, framing bias, and sunk cost fallacy.
- Investigation of the role of motivation and situational factors in modulating age differences in decision-making.
- Discussion of practical implications and potential interventions to support effective decision-making in older adults.
Excerpt from the Book
4.1 Negativity Bias
One of the most important age-related changes in decisional biases is the difference in the negativity bias, since changes in other biases are also, at least partly, explained by it. The resulting positivity bias can be seen as the cause for the shift in goals over the life-span and with such as responsible for major changes in DM in OA. In younger adults a negativity bias is present, which means that negative information has a higher influence on individuals than positive information (cf. Baumeister et al., 2001, pp. 340-343). Over the life-span this bias, simply speaking, changes by 180 degrees, which means that the relative weight on positive information increases significantly with age (cf. Carstensen & Mikels, 2005, pp. 118-119). In the abstracts below, I define how and why a positivity bias exists in OA followed by empirical and neurological evidence.
The positivity effect has its origin in the literature review of Mather & Carstensen (2005a), based on the improvement in emotion regulation, which is caused by the restriction in the perceived future according to the SST (cf. pp. 496-497). The argumentation is consistent with results of Carstensen et al. (2000). As hypothesized, OA face negative emotions less often, while there is no difference for positive emotions without any influence on the intensity of feelings (cf. p. 648). Additionally, the lower likelihood of a persisting negative mood indicates an improvement in emotion regulation (cf. p. 649).
Summary of Chapters
1 Introduction: Introduces the relevance of studying aging and decision-making due to global demographic shifts and the significant decision-making responsibilities held by older adults.
2 Overview on Decision Making: Establishes the foundations of rational decision theory, bounded rationality, heuristics, and the dual-process model of cognition.
3 Implications of Aging: Discusses how aging affects the deliberative and experiential systems, highlighting the role of processing speed, working memory, and emotion regulation.
4 Age-related Differences in Decision Making: Provides an in-depth analysis of specific biases—negativity, framing, sunk cost, priming, and overconfidence—and how they manifest or change in older adults.
5 Implications of Age Differences in Decision Making: Explores practical measures and interventions, such as decision aids, to improve decision-making outcomes for older adults in complex situations.
6 Conclusion: Summarizes key findings regarding the interaction between cognitive decline and experiential development, and identifies the need for future empirical research.
Keywords
Decision Making, Aging, Older Adults, Cognitive Decline, Deliberative Processes, Experiential Processes, Negativity Bias, Positivity Effect, Framing Bias, Sunk Cost Fallacy, Priming Effect, Overconfidence Bias, Emotion Regulation, Socioemotional Selectivity Theory, Dual-Process Models
Frequently Asked Questions
What is the core focus of this thesis?
The work focuses on how aging influences decision-making (DM) processes and whether typical decision-making biases differ between younger and older adults.
What are the primary themes discussed?
Key themes include the dual-process theory of cognition, the impact of cognitive decline on decision-making, the role of emotion regulation, and age-related changes in specific biases.
What is the main research question?
The thesis addresses whether biases found in decision-making literature differ between younger adults and older adults, and how these differences influence decision outcomes.
What scientific methods were employed?
The work is a literature-based thesis, performing an extensive overview and synthesis of existing academic papers and empirical studies on aging, cognitive psychology, and decision-making.
What does the main body of the work cover?
The main body examines the foundations of DM, the neurological and psychological implications of aging on mental processes, and provides a detailed review of age-related differences across various behavioral biases.
Which keywords best characterize the work?
The work is best characterized by terms such as decision-making, aging, cognitive decline, dual-process models, and specific behavioral biases like the positivity effect and sunk cost fallacy.
How does the experiential system compensate for cognitive decline in older adults?
According to the thesis, older adults rely more on their accumulated crystallized knowledge, domain-specific expertise, and improved emotion regulation to compensate for declines in processing speed and working memory.
What role does motivation play in the decision-making of older adults?
Motivation is a crucial determinant; the thesis argues that when older adults are appropriately motivated or held accountable, they can effectively utilize their remaining cognitive resources to reduce biases and improve decision quality.
How does the framing bias specifically affect older adults?
The findings are mixed; while some studies suggest older adults are more susceptible to framing effects due to cognitive constraints, others show no age difference or find that manipulations toward analytical thinking can mitigate these effects.
- Citar trabajo
- Jonas Junk (Autor), 2019, Decision-Making. The impact of aging, Múnich, GRIN Verlag, https://www.grin.com/document/540413
