Taking the Biggest First: Age Differences in Preferences for Monetary and Hedonic Sequences

Strough, JoNell; Bruin, Wändi Bruine de; Parker, Andrew M.

doi:10.1093/geronb/gbx160

Cited by 16 publications

(26 citation statements)

References 48 publications

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“…Although older adults face well‐documented age‐related decline in cognitive abilities that could harm their ability to make financial decisions (Gamble, Boyle, Yu, & Bennett, ), it has been suggested that they also have more experience‐based knowledge that could benefit financial decisions (Bruine de Bruin et al, ; Bruine de Bruin, Parker, & Fischhoff, ; Kovalchik, Camerer, Grether, Plott, & Allman, ; Li, Baldassi, Johnson, & Weber, ; Li et al, ). Additionally, older adults may experience changes in emotions and motivation, which could be relevant to making decisions (e.g., Bruine de Bruin, ; Strough, Bruine de Bruin, & Parker, in press; Strough, Parker, & Bruine de Bruin, ). Our paper is part of an emerging literature that aims to understand age differences in decision making, roles of various cognitive individual‐differences characteristics (such as numeracy and experience‐based knowledge), and noncognitive individual‐differences characteristics (such as negative emotions and motivation).…”

Section: Introductionmentioning

confidence: 99%

Age differences in financial decision making:The benefits of more experience and less negative emotions

Eberhardt

Bruin

Strough

2018

Behavioral Decision Making

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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.

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Section: Introductionmentioning

confidence: 99%

Age differences in financial decision making:The benefits of more experience and less negative emotions

Eberhardt

Bruin

Strough

2018

Behavioral Decision Making

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“…On the other hand, Strough et al (2019) found that older adults preferred taking the biggest event sooner instead of later, in both monetary and hedonic contexts. Löckenhoff and Samanez-Larkin (2020) also found greater preference for decreasing sequences (of monetary outcomes) among older age subjects.…”

Section: Theoretical Frameworkmentioning

confidence: 86%

The improving sequence effect on monetary sequences

Garcia

Torrecillas

Rambaud

2020

Heliyon

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“…Finally, we expect that the relative inattention to duration and the desire for good endings are part of people’s basic cognitive machinery and as such are not greatly modified by experience or education (but see Strough et al, 2019 ). Nevertheless, there is research showing (a) that marketers are likely to target behavioral biases, particularly of people who are poor and have less education, and (b) that individuals learn from experience with various financial products.…”

Section: Hedonics Of Debt Paymentmentioning

confidence: 99%

The Hedonics of Debt

et al. 2020

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Psychologists and economists often discuss the “pain” of paying for our purchases. Four experiments examine how people evaluate prospective debt payments, analyzing how different features of a loan (down payment, final payment, duration, monthly payments) affect willingness to accept the loan. Akin to previous findings on physical pain, participants exhibited duration neglect and overweighted final moments. However, participants also focused heavily on the monthly or average payment (unlike in retrospective studies of physical pain where only peak-end moments seem to count). In Experiment 2, participants’ willingness to accept the loan was not significantly diminished by making it more expensive through keeping the same monthly payment but extending the length of the loan by 40% (evincing duration neglect). Further, in Experiments 3 and 4, we show that participants increased their willingness to buy if loans were made longer and more expensive by adding smaller, less “painful” payments to the end.

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Taking the Biggest First: Age Differences in Preferences for Monetary and Hedonic Sequences

Abstract: We discuss "taking the biggest first" preferences in light of prior mixed findings on age differences in sequence preferences. We highlight the distinct roles of experience- and emotion-based decision-making processes. We propose applications to financial and health-care settings.

Cited by 16 publications

References 48 publications

Age differences in financial decision making:The benefits of more experience and less negative emotions

Age differences in financial decision making:The benefits of more experience and less negative emotions

The improving sequence effect on monetary sequences

The Hedonics of Debt

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