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Age, Loss Minimization, and the Role of Probability for Decision-Making


Best, Ryan; Freund, Alexandra M (2018). Age, Loss Minimization, and the Role of Probability for Decision-Making. Gerontology, 64(5):475-484.

Abstract

Background: Older adults are stereotypically considered to be risk averse compared to younger age groups, although meta-analyses on age and the influence of gain/loss framing on risky choices have not found empirical evidence for age differences in risk-taking. Objective: The current study extends the investigation of age differences in risk preference by including analyses on the effect of the probability of a risky option on choices in gain versus loss situations. Methods: Participants (n = 130 adults aged 19–80 years) chose between a certain option and a risky option of varying probability in gain- and loss-framed gambles with actual monetary outcomes. Results: Only younger adults displayed an overall framing effect. Younger and older adults responded differently to probability fluctuations depending on the framing condition. Older adults were more likely to choose the risky option as the likelihood of avoiding a larger loss increased and as the likelihood of a larger gain decreased. Younger adults responded with the opposite pattern: they were more likely to choose the risky option as the likelihood of a larger gain increased and as the likelihood of avoiding a (slightly) larger loss decreased. Conclusion: Results suggest that older adults are more willing to select a risky option when it increases the likelihood that larger losses be avoided, whereas younger adults are more willing to select a risky option when it allows for slightly larger gains. This finding supports expectations based on theoretical accounts of goal orientation shifting away from securing gains in younger adulthood towards maintenance and avoiding losses in older adulthood. Findings are also discussed in respect to the affective enhancement perspective and socioemotional selectivity theory.

Abstract

Background: Older adults are stereotypically considered to be risk averse compared to younger age groups, although meta-analyses on age and the influence of gain/loss framing on risky choices have not found empirical evidence for age differences in risk-taking. Objective: The current study extends the investigation of age differences in risk preference by including analyses on the effect of the probability of a risky option on choices in gain versus loss situations. Methods: Participants (n = 130 adults aged 19–80 years) chose between a certain option and a risky option of varying probability in gain- and loss-framed gambles with actual monetary outcomes. Results: Only younger adults displayed an overall framing effect. Younger and older adults responded differently to probability fluctuations depending on the framing condition. Older adults were more likely to choose the risky option as the likelihood of avoiding a larger loss increased and as the likelihood of a larger gain decreased. Younger adults responded with the opposite pattern: they were more likely to choose the risky option as the likelihood of a larger gain increased and as the likelihood of avoiding a (slightly) larger loss decreased. Conclusion: Results suggest that older adults are more willing to select a risky option when it increases the likelihood that larger losses be avoided, whereas younger adults are more willing to select a risky option when it allows for slightly larger gains. This finding supports expectations based on theoretical accounts of goal orientation shifting away from securing gains in younger adulthood towards maintenance and avoiding losses in older adulthood. Findings are also discussed in respect to the affective enhancement perspective and socioemotional selectivity theory.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:06 Faculty of Arts > Institute of Psychology
08 Research Priority Programs > Dynamics of Healthy Aging
Dewey Decimal Classification:150 Psychology
Uncontrolled Keywords:Ageing, Geriatrics and Gerontology
Language:English
Date:1 January 2018
Deposited On:29 Oct 2018 09:56
Last Modified:31 Dec 2018 08:31
Publisher:Karger
ISSN:0304-324X
Additional Information:This is the peer-reviewed but unedited manuscript version of the following article: Age, Loss Minimization, and the Role of Probability for Decision-Making / Best R., Freund A.M. The final, published version is available at http://www.karger.com/?doi=10.1159/000487636
OA Status:Green
Publisher DOI:https://doi.org/10.1159/000487636
Official URL:https://www.karger.com/Article/Abstract/487636
PubMed ID:29621760

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