FEATURE6 July 2020

The age effect on making decisions

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Behavioural economics Features Impact

Crawford Hollingworth looks at how people’s biases are affected by their age. 

Older couple watching TV_crop

We’re all familiar with the ever-growing evidence from behavioural science that we are highly prone to different cognitive biases that affect our thinking, judgement and decision-making – from optimism bias and present bias to framing and anchoring effects. But scientists are also beginning to understand how our susceptibility to certain biases changes throughout our life, from childhood to old age.

Contrary to what people sometimes think, our brains do not fully mature until our mid-20s. Then, as we enter our 30s, some functions in our brain – our reasoning ability and logical problem solving – begin a slow decline. Happily, for the most part these declines are offset by our increasing knowledge and experience of the world. In fact, some argue that we have the capacity to make our best decisions in middle-age (The Age of Reason, Agarwal, S, Driscoll, JC, Gabaix, X, Laibson, DI).

Neuroscience research suggests that our brains continue to develop until we are in our ...