Trajectory of risky decision making for potential gains and losses from ages 5 to 85

• Published in: Journal of behavioral decision making Vol. 24; no. 4; pp. 331 - 344
• Main Authors: Weller, Joshua A., Levin, Irwin P., Denburg, Natalie L.
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01-10-2011; Wiley Periodicals Inc
• Subjects: Age difference; Behavioral decision theory; children; Cognition & reasoning; cognitive aging; Decision making; Economic psychology; expected value; Life history; Management science; Neuropsychology; older adults; Operations research; Risk; Risk aversion; risk taking; Studies
• ISSN: 0894-3257; 1099-0771
• DOI: 10.1002/bdm.690

The ability to make advantageous decisions in the face of uncertainty is an essential human skill, yet the development of such abilities over the lifespan is still not well understood. In the current study, from childhood through older adulthood, we tracked the developmental trajectory of risk taking for gains and losses, and expected value (EV) sensitivity in risky choices. In the gain domain, risk‐taking decreased consistently across the lifespan. In the loss domain, risk‐taking was relatively constant across ages, a result we attribute to the pervasiveness of loss aversion. EV sensitivity showed an inverted‐U‐shaped function, increasing from childhood to adulthood but then decreasing for the elderly, which occurred for both risky gains and risky losses. This finding is consistent with neuropsychological and neuroanatomical evidence concerning the role of the frontal lobe in decision making, which is relatively late to develop during childhood but may degrade earlier in the later years. Copyright © 2010 John Wiley & Sons, Ltd.