The brains of older people may be slowing but their experience makes up for the decline, a University of California, Riverside, assistant professor of management and several colleagues discovered while asking participants in a study a series of finance-related questions.
Ye Li, the UC Riverside assistant professor and Martine Baldassi, Eric J. Johnson and Elke U. Weber, all currently or formerly of Columbia University, outlined the results in a paper "Complementary Cognitive Capabilities: Economic Decision Making, and Aging", which was published in the journal Psychology and Aging.
The study is believed to be the first to measure decision making over the lifespan through the lens of two types of intelligence - fluid and crystallized.
Fluid intelligence is the ability to learn and process information. Crystallized intelligence refers to experience and accumulated knowledge.
The findings also support the fact that older people could be further helped by being provided aids to ease the burden on their decreased fluid intelligence, such as a calculator or advisor, when making significant financial decisions, Li said.
On the other hand, younger adults may benefit from more financial education so that they can gain experience with major financial decisions before making them in the real world, reports Science Daily.
--IANS (Posted on 26-09-2013)