Age, Loss Minimization, and the Role of Probability for Decision-Making

Abstract

Background: Older adults are stereotypically considered to be risk averse compared to younger age groups, although meta-analyses on age and the influence of gain/loss framing on risky choices have not found empirical evidence for age differences in risk-taking. Objective: The current study extends the investigation of age differences in risk preference by including analyses on the effect of the probability of a risky option on choices in gain versus loss situations. Methods: Participants (n = 130 adults aged 19–80 years) chose between a certain option and a risky option of varying probability in gain- and loss-framed gambles with actual monetary outcomes. Results: Only younger adults displayed an overall framing effect. Younger and older adults responded differently to probability fluctuations depending on the framing condition. Older adults were more likely to choose the risky option as the likelihood of avoiding a larger loss increased and as the likelihood of a larger gain decreased. Younger adults responded with the opposite pattern: they were more likely to choose the risky option as the likelihood of a larger gain increased and as the likelihood of avoiding a (slightly) larger loss decreased. Conclusion: Results suggest that older adults are more willing to select a risky option when it increases the likelihood that larger losses be avoided, whereas younger adults are more willing to select a risky option when it allows for slightly larger gains. This finding supports expectations based on theoretical accounts of goal orientation shifting away from securing gains in younger adulthood towards maintenance and avoiding losses in older adulthood. Findings are also discussed in respect to the affective enhancement perspective and socioemotional selectivity theory.

Losing Money and Motivation: Effects of Loss Incentives on Motivation and Metacognition in Younger and Older Adults

“…However, the motivational shift theory appears to primarily apply to older adults’ goal setting and preferences in decision-making scenarios, and in particular whether one gravitates toward opportunities for growth and improvement in cognitive or physical performance vs. maintenance or compensation for loss on those fronts (e.g., Freund and Ebner, 2005 ; Best and Freund, 2018 ). It may also be of relevance in avoidance-learning paradigms, where older adults have sometimes shown faster learning in response to loss ( Frank and Kong, 2008 ; Eppinger and Kray, 2011 ; Hämmerer et al, 2011 ).…”

Age, knowledge, preferences, and risk tolerance for invasive cardiac care

“…Older adults prioritize avoiding loss more than accruing gains, and may choose a less advantageous option if larger losses can be avoided. 34 The decline in risk tolerance with surgery on the standard gamble option reflects this concept: Older adults prefer to keep the hand they have been dealt, rather than risking it for an uncertain future state of health.…”

Opposite reactions to loss incentive by young and older adults: Insights from diffusion modeling

“…resources differentially limited for older adults. Thus, motivation-shift theory proposes that while young adults are more motivated to achieve gains, older adults are more motivated to avoid losses (Best & Freund, 2018;Freund & Ebner, 2005). However, while motivation-shift theory may help explain older adults' preferences and choices in some situations (Byrne & Ghaiumy Anaraky, 2020;Ebner et al, 2006;Frank & Kong, 2008), there is little evidence that loss incentives differentially improve older adults' performance.…”