Eberhardt, W, Bruine de Bruin, W orcid.org/0000-0002-1601-789X and Strough, J (2019) Age differences in financial decision making: The benefits of more experience and less negative emotions. Journal of Behavioral Decision Making, 32 (1). pp. 79-93. ISSN 0894-3257
Abstract
The emerging literature on aging and decision making posits that decision‐making competence changes with age, as a result of age differences in various cognitive and noncognitive individual‐differences characteristics. In a national life‐span sample from the United Kingdom (N = 926), we examined age differences in financial decisions, including performance measures of sunk cost and credit card repayment decisions, and self‐report measures of money management and financial decision outcomes. Participants also completed four individual‐differences characteristics that have been proposed as relevant to financial decision making, including two cognitive ones (numeracy and experience‐based knowledge) and two noncognitive ones (negative emotions about financial decisions). First, we examined how age was related to the four financial decision‐making measures and the four individual‐differences characteristics. Older age was correlated to better scores on each of the four financial decision‐making measures, more experience‐based knowledge, less negative emotions about financial decisions, whereas numeracy and motivation were not significantly correlated with age. Second, we found that considering both the two cognitive and the two noncognitive individual‐differences characteristics increased predictions of financial decision making, as compared with considering either alone. Third, we examined how these four individual‐differences characteristics contributed to age differences in financial decision making. Older adults' higher levels of experience‐based knowledge and lower levels of negative emotions seemed to especially benefit their financial decision making. We discuss implications for theories on aging and decision making, as well as for interventions targeting financial decisions.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2018 The Authors Journal of Behavioral Decision Making Published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/. |
Keywords: | cognitive aging; emotions; experience‐based knowledge; financial decision making; motivation; numeracy |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Management Division (LUBS) (Leeds) > Management Division Decision Research (LUBS) |
Funding Information: | Funder Grant number Riksbankens Jubileumsfond M14-0138:1 |
Depositing User: | Symplectic Publications |
Date Deposited: | 26 Jun 2018 10:02 |
Last Modified: | 25 Jun 2023 21:24 |
Status: | Published |
Publisher: | Wiley |
Identification Number: | 10.1002/bdm.2097 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:132537 |
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