14 DAY TRIAL // Investigations carried out by experts at the Vanderbilt University have demonstrated that seniors don't take money-related decisions that are more informed by their experiences. Tests have demonstrated that they are just as unpredictable in the decisions they will make as younger people are.
For starters, one of the most commonly-assumed things about seniors is that they are somehow more conservative in their investments than younger people are. But the latest studies on the issue contradict that idea, suggesting another type of behavior.
Neuroscientists are currently using economic analysis and brain-imaging studies to discover why older people act the way they do when manging their money, and why they are less predictable than thought.
One of the most important conclusions in the new study was that seniors tend to take the decisions they do largely because of age-induced changes in the way their brains are wired up.
This sometimes causes them to bet their money on risky businesses, and adhere to less logical investment decisions than theory younger peers. Investigating this issue holds great significant for seniors, as well as for those seeking to understand their behavior.
Scientists could for example learn what bits of information older people are generally interested in when making business decisions. As the proportion of seniors in the general population increases, this is becoming increasingly important.
“Huge demographic changes are taking place all over the world. Very soon there will be a much larger percentage of people over age 65, and that has economic implications,” says Gregory Samanez Larkin.
The Vanderbilt postdoctoral researcher is also the co-director of the Scientific Research Network on Decision Neuroscience and Aging. This is a multidisciplinary, multi-center effort, which is funded by the National Institute on Aging (NIA).
Surprisingly, he adds, many financial regulatory agencies have a vested interest in using neuroscience for similar studies, hoping that they could thus find a way of allowing seniors to make better decisions.
“The natural idea is that older people are more risk-averse, but they are not uniformly more risk-averse. In some cases, they are more risk-seeking,” adds expert Scott Huettel.
The investigator holds an appointment as the co-director of the Duke University Center for Neuroeconomic Studies.
Seniors “don't make as good decisions and don't use the information as well,” as they were expected, the scientist says, quoted by Technology Review.