The Effects of Aging on Decision Making

A Selective Literature Overview

With a growing part of the population getting older, the potential demands of older adults put increasing strain on already-limited resources. It is therefore of crucial importance to understand the effects of aging on the maintenance of independence, with the target to facilitate and improve independent functioning. In this regard, decision making processes are, given their importance in everyday life functioning, particularly important. In addition, successful decision making has a higher impact for older than for young adults; compensation for disadvantageous judgments and decisions is in relation less demanding for young adults, as they have higher physical resiliency and more time available to cope with unfavorable decision outcomes.

The changes in population structure require people to maintain strong decision-making competence for an increasing proportion of their lifetime. Our western societies highly weight values such as independence and self-determinacy. This implies sharing in decisions with advisors rather than relying on paternalism (Zwahr, 1999). For example, within many older adults’ lifetime, there was a shift from a model in which the advice of one’s family doctor was never challenged towards a health care model in which patients expect to be equal partners with their doctors in decision making (Mather, 2006). As a result, those who are more able to handle such decisions are more likely to get beneficial health care.

Financial decisions also are an important domain in which older adults are required to make decisions. An increasing part of the population is relying on individual financial plans to maintain the living standard after retirement. Even those individuals that call on professionals to develop a formal financial plan need to be aware that they cannot entirely redraw from making decisions, as tax laws, market conditions, and the individual needs of the investor are constantly changing. Due to a higher life expectancy, savings and financial assets must hold longer, and high-quality decision making must be maintained. In an environment rich in information and with high uncertainty levels, this task can be difficult, even for those with experience in financial decision making. For people with (age-related) reductions in their information processing abilities, making high-quality decisions may be beyond their capabilities. Furthermore, the trends towards geographically dispersed families and single-person households limit older adults’ access to support and knowledge from family members.

In studies of self-evaluation, it has been shown that older adults feel relatively confident about their ability to make decisions. This confidence however strongly contrasts with their concern about other cognitive abilities, such as memory, that are underlying decision making abilities (Hertzog, Lineweaver, & McGuire, 1999; Princeton Survey Research, 1998). The neglect of changes in decision making abilities may be due to the fact that decision making involves a large variety of subprocesses, not all of them being influenced equally by aging. Decision making involves for example the ability to think at least one step ahead to examine the consequences of the different possibilities and make the best decision, keeping multiple pieces of information in mind to decide between options, and dealing with the emotional aspects of the decision.

Hence the question to know which subprocesses underlying decision making are the most influenced by age arises. Peters and colleagues hypothesize that age has an impact on the dual processes underlying decisions (Peters, Hess, Västfjäll, & Auman, 2007). They develop three general, complementary propositions about aging and the dual processes. Firstly, aging leads to declines in the efficiency of controlled processing mechanisms associated with deliberation, such as long-term and working memory, or explicit learning. A decline of these deliberative processes may lead to an enhancement of more implicit or automatic forms of knowledge in decisions. Second, the impact of emotional knowledge on decisions may become more important with age, because of age-related changes in social goals. And third, as people age, the experience in the use of affective knowledge increases, making them more expert in the use of affective information and enhancing their ability to rely on it. These propositions have in common the suggestion that adults rely more on affective information as they age, at least in comparison to their deliberative abilities that require greater conscious effort or do not help meet social goals (Carstensen & Turk-Charles, 1994; Hess, Waters, & Bolstad, 2000; Labouvie-Vief, 1999). Hence this shift towards an increased emotional processing may constitute a response of adaption to changes in cognitive skills, life-experiences, and in the processing of goals that promote well-being (Diener & Suh, 1997).

When starting from the premise that emotion processing in older adults has a higher impact on decision making than in young adults, a wide range of consequences can be expected. In fact, in many decisions emotions play a central role (Loewenstein & Lerner, 2000; Mellers & McGraw, 2001). For example, people often take into account the emotional state they will be in after making a decision and therefore choose options minimizing the chance of feeling regret (Mellers, Schwartz, & Ritov, 1999; Ritov, 1996). Probably even more widespread and influential are the unintended influences of emotions. Judgments about the affective value of a stimulus are rapid and easily available, and can be used as guiding cues for judgments and decisions (Finucane, Alhakami, Slovic, & Johnson, 2000; Slovic, Finucane, Peters, & MacGregor, 2007). Even emotions that are in no relation to the decision at hand can influence it (Isen, 2001; Lerner, Small, & Loewenstein, 2004).

Hence, changes in emotional experience that occur with age can have an important impact on decision making. One of the most influential theories in the entire field of aging research probably is the socioemotional selectivity theory (Carstensen, Isaacowitz, & Charles, 1999). According to this theory, older adults are more likely to maintain a positive emotional state, and to generally experience less negative affect than younger adults. Older adults’ negative affect also lasts for a shorter time than that of younger adults (Carstensen, Pasupathi, Mayr, & Nesselroade, 2000; Charles, Reynolds, & Gatz, 2001). The reduction in negative affect occurs, according to socioemotional selectivity theory, because the goals of people change when approaching the end of life and perceiving limitations on their time. This shift in goals consists in a stronger focus on achieving affective satisfaction and meaning rather than on the acquisition of new information; therefore, older adults focus more on regulating emotion, causing an enhancement of their everyday emotional experience.

It has been suggested that this enhanced focus on emotion regulation influences attention and memory (Mather, 2004; Mather & Carstensen, 2003). For example, Mather and colleagues observed in older adults a disproportionately poorer memory for negative events (Charles, Mather, & Carstensen, 2003), a distortion of autobiographical memories in a positive direction (Kennedy, Mather, & Carstensen, 2004), and memory distortions that favor chosen options over rejected options (Mather & Johnson, 2000).

The changes in emotional goals can also influence the way decisions are made. For example, older adults prefer to spend time with emotionally meaningful social partners (Fung, Lai, & Ng, 2001; Lang & Carstensen, 1994), probably the ones most likely to fulfill emotional needs. In young adults, this effect appears only if they are subject to a limited time horizon (Fung, Carstensen, & Lutz, 1999). Overall, older adults were found to be more sensitive to factors of the social context, easing the integration of relevant knowledge with the social information, and by that improving the self-reported social experience (Hess, Osowski, & Leclerc, 2005).

Besides the influence of aging on affective and deliberative information processing which may rent older adults more susceptible to various biases than their younger counterparts would be, the higher experience of older adults with most decision making situations may also have a moderating or enhancing effect on decision making. For example, Dijksterhuis and colleagues pointed out that decision making in older adults can be more effective than in younger adults in choices in which past experience provides additional guidance or in which greater deliberation would hinder decision making (Dijksterhuis, Bos, Nordgren, & van Baaren, 2006). Thus, the greater expertise of older adults in some choices can be beneficial for decision making. In fact, it has been shown that older adults can behave more like experts by making decisions faster, seeking out less information and discounting irrelevant information, having a better knowledge and control over the situational variables, and arriving at decision outcomes equivalent or superior to those of younger adults (Kim & Hasher, 2005; Meyer & Pollard, 2004; Tentori, Osherson, Hasher, & May, 2001).

Recently, an additional dimension that can explain part of the age differences in decision making has been established by Ratcliff, Thapar and McKoon (2006, 2007). These authors show that the decision criteria used by older and young adults differ, with younger adults using fewer criterions to reach a decision faster, whereas older adults focus more on decision accuracy.

Hence, most of the modern literature on aging assumes age differences in emotion and deliberative information processing to be underlying changes or non-changes in decision making. However, to quote Hanoch, Wood and Rice (2007): “there are literally thousands of research papers investigating judgment and decision-making. Relatively speaking, few of them have been devoted to the study of older adults.” Thus, age differences in processes involved in decision making have been reported by and large – but evidence on age differences in decision making per se is still sparse. Based on the assumption that age-related cognitive decline has negative effects on decision making, it seem fair to expect less favorable decision making in older adults. Taking into account the improvements in emotion processing, the positivity effect, and the greater life experience of older adults, these probably can compensate in part for the declines in cognitive abilities. Indeed, a number of studies have shown that older adults’ decision making capabilities can match those of younger adults (Chasseigne, Grau, Mullet, & Cama, 1999; Chen & Sun, 2003; Wood, Busemeyer, Koling, Cox, & Davis, 2005). To understand the conditions allowing older adults to make decisions as good as those of their younger pairs, Simon (1956), and in Simon’s tradition Gigerenzer and colleagues (Gigerenzer & Gaissmaier, 2011; Gigerenzer & Todd, 1999), argued that the study of either the environment or the mind will lead to clarifications about the underlying processes.

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