Paper by Gregory R. Samanez-Larkin, Camelia M. Kuhnen, Daniel J. Yoo, and Brian Knutson
As human life expectancy continues to rise, financial decisions of aging investors may have an increasing impact on the global economy. In this study, we examined age differences in financial decisions across the adult life span by combining functional neuroimaging with a dynamic financial investment task. During the task, older adults made more suboptimal choices than younger adults when choosing risky assets. This age-related effect was mediated by a neural measure of temporal variability in nucleus accumbens activity. These findings reveal a novel neural mechanism by which aging may disrupt rational financial choice.
Just a 101 comment: never confuse “correlated with” and “mediated by”, as the authors seem to do !
How about when choosing low risk assets? (Like equities in March 2009 and having enough capital saved to invest in them?)
In short, talk is cheap.
I doubt if the people doing this research have a clue about “the dynamic financial investment task.” I do not doubt that they believe they do.
That’s their problem.