Monday, February 01, 2010

Financial risk taking in the elderly - brain correlates

As I look at the current stock market swoon and decide to hang in there, I learn something I'd rather not know about my aging brain.....

Samanez-Larkin et al. first note research that shows that older adults make more errors when making risky decisions (In the domain of finance, healthy older investors have been shown to continue to invest in risky assets even after suffering losses in the stock market large enough to necessitate postponing retirement.) Then, using an investment task, the authors confirm that older adults make more risk-seeking mistakes, and find that these mistakes are mediated by increased temporal variability in the Nucleus Accumbens. Their findings  indicate an age-related subcortical deficit that may promote risky decision-making mistakes. Here is their abstract:
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.

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