Decision-Making Strategies and Performance Among Seniors

Abstract

Using paper and pencil experiments administered in senior centers, we examine decision-making performance in multi-attribute decision problems. We differentiate the effects of declining cognitive performance and changing cognitive process on decision-making performance of seniors as they age. We find a significant decline in performance with age due to reduced reliance on common heuristics and increased decision-making randomness among our oldest subjects. However, we find that increasing the number of options in a decision problem increases the number of heuristics brought to the task. This challenges the choice overload view that people give up when confronted with too much choice.

Keywords: experiments, decision making, choice overload, age effects, heuristics

JEL Classification: C91, D03, I18