Older adults select different but not simpler strategies than younger adults in risky choice

Younger and older adults often differ in their risky choices. Theoretical frameworks on human aging point to various cognitive and motivational factors that might underlie these differences. Using a novel computational model based on the framework of resource rationality, we find that the two age groups rely on different strategies. Importantly, older adults did not use simpler strategies than younger adults, they did not select among fewer strategies, they did not make more errors, and they did not put more weight on cognitive costs. Instead, older adults selected strategies that had different risk propensities than those selected by younger adults. Our modeling approach suggests that age differences in risky choice are not necessarily a consequence of cognitive decline; instead, they may reflect motivational differences between age groups. What are the psychological mechanisms underlying adult age differences in economic decision making? We investigated this question with a model based on the framework of resource rationality, which posits that people adaptively use the cognitive resources available to them. Unlike commonly used economic models of decision making, this model can shed light on the cognitive processes that drive age differences in choice. Our findings show that younger and older adults use different decision strategies and that the age differences are not necessarily the result of cognitive decline; instead, they may be a result of age differences in motivational factors. By providing novel insights into the psychological mechanisms of age differences in decision making, our modeling approach can inform interventions and choice architectures supporting older adults' decision making.