Investigators
George Loewenstein - Project Mentor
Brian Knutson - Assistant Professor of Psychology at Stanford
Camelia Kuhnen - Graduate Student in the School of Business at Stanford
Gregory Larkin - Graduate Student in Psychology at Stanford

Common stereotypes of aging and risky behavior call to mind images of white-haired slot machine players and victims of insurance schemes. These prevalent images in popular culture portray older adults as having vulnerable risk-preferences -- both risk-seeking and risk-averse. Recent neuroimaging data suggests that risk-seeking choices (such as gambling at a casino) and risk-averse choices (such as buying insurance) may be driven by two distinct neural mechanisms involving the nucleus accumbens (NAcc) and the anterior insula, whose activation may index positive and negative anticipatory affective states, respectively. Activating one of these two systems can lead to a shift in risk preferences.

In this study, we will behaviorally examine how aging may influence risk preferences in the context of investing behavior, and through the use of functional magnetic resonance imaging (FMRI), we will explore whether the coupling of neural activation with risk preferences changes across the life span. The results of this study should illuminate the underlying components of financial decision making over the life span; foster the development of strategies that help adults make optimal financial decisions in late life; and inform policy decisions on retirement and investment accounts.

This study is a seed project for the Center on Advancing Decision Making for Aging.

Contact
Tamara L. Sims