Navigation Links
Age-old money matters: Positivity in older adults leads to balanced investments

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
Association for Psychological Science

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:
(Date:11/27/2015)... ... , ... According to an article published November 13th on, ... D.C. revolved around the fact that proper dental care, both at-home and in the ... between periodontal disease (more commonly referred to as gum disease) and diabetes. According to ...
(Date:11/27/2015)... (PRWEB) , ... November 27, 2015 , ... ... affecting the health care in America. As people age, more care is needed, ... costs are rising, and medical professionals are being overworked. The forgotten part of ...
(Date:11/27/2015)... ... November 27, 2015 , ... "When I was traveling, ... from Hillside, N.J. "Many people catch diseases simply from sitting on such dirty ... be protected from germs." , He developed the patent-pending QUDRATECS to eliminate the ...
(Date:11/27/2015)... ... 2015 , ... ProSidebar: Fashion is a set of 30 kinetic ... Fasion, video editors can easily add an informative sidebar to any FCPX production. ... presets featuring self-animating drop zones, lines, bars, and text with the ease of FCPX's ...
(Date:11/27/2015)... (PRWEB) , ... November 27, 2015 , ... ... of the well-respected Microsoft Dynamics SL User Group (MSDSLUG). Recognized as Microsoft’s official ... independent group of Microsoft Dynamics SL software users, partners, industry experts and representatives. ...
Breaking Medicine News(10 mins):
(Date:11/26/2015)... 26, 2015 Research and Markets ( ) ... Pacemaker Market Outlook to 2019 - Rise in Cardiac Disorders ... report to their offering. Boston ... Boston scientific and others. --> ... Biotronik, Boston scientific and others. ...
(Date:11/26/2015)... DUBLIN , Nov. 26, 2015 ... the addition of the "2016 Future Horizons ... Monitoring (TDM) Market: Supplier Shares, Country Segment Forecasts, ... offering. --> ... comprehensive analysis of the Japanese therapeutic drug monitoring ...
(Date:11/26/2015)... 26, 2015 ... of the  "2016 Future Horizons and ... Surface Testing Market: Supplier Shares, Competitive ... offering.  --> ) ... "2016 Future Horizons and Growth Strategies ...
Breaking Medicine Technology: