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:10/13/2017)... ... October 13, 2017 , ... Lori R. Somekh, founder ... of ElderCounsel, a national organization of elder law and special needs planning attorneys. “Membership ... rules. It also provides a forum to network with elder law attorneys nationwide,” said ...
(Date:10/13/2017)... NJ (PRWEB) , ... October 13, 2017 , ... Global ... at scenic Alexandria Park in Milford, NJ. This free event, sponsored by Global ... physical activity. The fun run is geared towards children of all ages; it ...
(Date:10/13/2017)... ... October 13, 2017 , ... “America On The Brink”: ... “America On The Brink” is the creation of published author, William Nowers. ... As a WWII veteran, he spent thirty years in the Navy. Following ...
(Date:10/12/2017)... ... October 12, 2017 , ... IsoComforter, Inc. ( https://isocomforter.com ... introduction of an innovative new design of the shoulder pad. The shoulder pad ... comfort while controlling your pain while using cold therapy. By utilizing ice and water ...
(Date:10/12/2017)... , ... October 12, 2017 , ... HMP , ... recipient of a 2017 Folio Magazine Eddie Digital Award for ‘Best B-to-B Healthcare Website.’ ... on October 11, 2017. , The annual award competition recognizes editorial and design excellence ...
Breaking Medicine News(10 mins):
(Date:10/10/2017)... 2017  NDS received FDA 510(k) clearance in May 2017 for ... stand specifically designed for endoscopy environments. An innovative secondary monitor solution, ... solution to support the improvement of patient outcomes, procedural efficiency, and ... ... ...
(Date:10/7/2017)... Texas , Oct. 6, 2017   Provista, ... with more than $100 billion in purchasing power, today ... news and information. The Newsroom is the ... and industry trends, infographics, expert bios, news releases, slideshows ... having access to a wealth of resources at their ...
(Date:10/4/2017)... , Oct. 4, 2017  South Korean-based healthcare product ... training aide "cprCUBE" on Kickstarter. The device will educate ... cardiac arrests with better efficiency compared to the dated ... real-time feedback on efficacy of the compression for a ... has a goal to raise $5,000. ...
Breaking Medicine Technology: