Older Gamblers Make Risky Financial Decisions Study Reveals

Published Tuesday, October 01, 2013 - Online-Casinos.com
Older Gamblers Make Risky Financial Decisions Study Reveals

We all are aware of the low risk high reward technique that lottery presents to punters, similar to the low risk high reward possibilities of the penny stock market and mutual funds. We are constantly being ask to risk some small amount such as a couple of dollars for a lottery ticket knowing full well the odds of winning the millions are few but you still have to purchase a ticket to get into the game.

As we age the law of diminishing returns takes hold of some people and caution is thrown to the wind. Researchers from New York University the University of Sydney, and Yale’s School of Medicine asked 135 healthy participants aged from 12 to 90 to make a series of financial decisions, choosing between options that carried different levels of risk and reward.

The findings that were recently published in the Proceedings of the National Academy of Sciences said, compared to other age groups, older adults tended to prefer to lock in guaranteed earnings over gambling on a bigger win. But when it came to gambling on a loss (where you can choose between, a $5 loss or a chance to lose either $0 or $8), older people took significantly more risks. Each participant was asked to make 320 decisions: for example, choosing between receiving $5 or the chance to win $20 in a lottery. On the average, participants over 65 earned 39% less than young adults, aged 21-25, and 37% less than mid-life adults, aged between 30 and 50.

Older participants tended were more inconsistent in their decisions, “despite clear evidence that they understand the task well”, researchers revealed.

Dr Agnieszka Tymula, a University of Sydney economist, commented, “We were surprised by the results,” the Dr. continued, “The fact that older adults were really at their peak of performance in terms of IQ scores and still showed such decline in choice consistency and rationality is really worrying.”

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