Navigation Links
Age-old money matters: Positivity in older adults leads to balanced investments
Date:7/10/2008

The economic and psychological term known as "sunk-cost fallacy" is a bias that leads someone to make a decision based solely on a previous financial investment. For example, a baseball fan might attend every game of the season only because he already purchased the tickets. But not everyone would force themselves to brave the pouring rain for a single game in one season simply because they previously paid for the seats.

So who is more likely to commit or avoid the sunk-cost fallacy and why? In a recent study, psychologists JoNell Strough, Clare Mehta, Joseph McFall and Kelly Schuller from West Virginia University found that younger adults were more likely to commit to a situation if they had already invested money into it, and that older adults showed a more balanced fiscal perspective of the same situation.

To get to this conclusion, the researchers presented college students and senior citizens with two vignettes to test how likely each age group would be to watch a boring, paid-for movie versus a boring, free movie.

The first vignette specifically read, "You paid $10.95 to see a movie on pay TV. After five minutes, you are bored and the movie seems pretty bad"; the other vignette did not include a cost. Participants then selected from five options regarding their projected time commitmentstop watching entirely, watch for ten more minutes, watch for twenty more minutes, watch for thirty more minutes or watch until the end.

The results, which appear in the July issue of Psychological Science, a publication of the Association for Psychological Science, show the older adults spent the same amount of time watching the movie regardless of monetary investment. In contrast, the young adults chose to invest more time in the paid-for movie than the free movie in order to avoid wasting $10.95. The psychologists attribute the distinction between younger and older peoples' decisions to differences in the way each group thinks about gains versus losses.

"Younger adults show a negativity bias," Strough explained. "They weigh negative information, such as the lost investment, more heavily than positive information and so they try to 'recover' the lost investment by investing more time."

On the other hand, older adults are more likely to view the positive side of situations; therefore, their decisions reflect a more balanced view of gains and losses. According to the psychologists, older adults' more balanced view may help them recognize that, once made, this type of investment cannot be recovered simply by committing more time to the activity.


'/>"/>

Contact: Katie Kline
kkline@psychologicalscience.org
202-293-9300
Association for Psychological Science
Source:Eurekalert

Related medicine news :

1. New Report: Increasing Mississippis Cigarette Tax Will Reduce Smoking, Save Lives and Save Money
2. CVS/pharmacy Makes It Easier for Consumers to Save Money and Track Spending with Health Savings and Flexible Spending Accounts
3. Volkswagen Partners With Legendary Rock Band The Who To Raise Money for Teenage Cancer Trust Charity
4. Hip replacement improves function, saves money, at any age
5. Economy and Money Top Causes of Stress for Americans
6. Eva Longoria Parker Participates in 5k Run/Walk to Raise Money for Children With Cancer and Offers Support to Univision Talent Fernando Del Rincons Cancer Diagnosis
7. New Latent TB Drug Saves Lives, Money
8. Rifampin: Latent TB treatment saves time money and lives
9. Chronic disease management: Does it improve health and save money?
10. Less Money Means More Hurting
11. Top UHW-W Officers Violated Federal Law, Deceived Members in Diverting Millions in Dues Money to Outside Fund
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:5/26/2017)... (PRWEB) , ... May 26, 2017 , ... ... the first ever copper, antimicrobial, mesh back 24/7 task chair specifically designed for ... applications. “We are thrilled to partner with Cupron® to provide customers with ...
(Date:5/26/2017)... ... May 26, 2017 , ... Yisrayl Hawkins, Pastor and Overseer ... week that is focusing on the Peace Agreements being discussed by President Donald Trump ... in a race to try to speed up peace talks in the continuous battle ...
(Date:5/26/2017)... ... May 26, 2017 , ... Dr. Alex Rabinovich, a highly-skilled ... a new, informational blog post on insurance options. If a Bay Area patient has ... help save time and money. Visiting an in-network provider for a second opinion can ...
(Date:5/26/2017)... ... May 26, 2017 , ... ... year’s recipient of proceeds from its 14th Annual Clays for Kids fundraiser, to ... Road 30, Bennett, Colorado. , As part of BluSky’s partnership with The ...
(Date:5/26/2017)... ... 26, 2017 , ... Water damage to the flooring of several classrooms at ... education officials with a number of critical issues to address before students could return ... accomplished with little or no disruption to class schedules. Second, the project had to ...
Breaking Medicine News(10 mins):
(Date:5/12/2017)... and Canada joint tech company Laughing Face has ... detergent, and features a powerful disinfection process. The company ... washes and sanitizes women,s panties or babies, cloth diapers in 25 ... ... an external water inlet. ...
(Date:5/10/2017)... May 10, 2017 Global Health Intelligence ... Latin America , published its 2017 ranking of the ... based on extensive data analysis from GHI,s hospitals database ... database for the region. The GHI database covers 86% of ... more than 130 data points for each institution in key ...
(Date:5/10/2017)... 2017 CSSi, the global leader in patient ... industry, is proud to announce the launch of its ... features both enriched content and a customized layout that ... company,s already well-established position as the top global patient ... many months of hard work, we are delighted to ...
Breaking Medicine Technology: