Tuesday, June 25, 2013

Older People Make Better Decisions

In an earlier post, I reviewed research showing that seniors compensate for any loss of memory ability by having developed learning and memory schemas over the years. Such schemas are ingrained strategies and ways of efficient learning that improve with experience and age.

Now I have come across recent research that shows another age-developed skill: improved decision-making ability. Teenagers are notorious for poor decision-making. Of course that is inevitable, given that their brains are still developing and they have had relatively little life experience to show them what works and what doesn’t. Unfortunately, what doesn’t work often has more emotional appeal, and most of us at any age are more susceptible to our emotions than to cold, hard logic.

Seniors also are prone to poor decision-making if senility has set it. Unscrupulous people take advantage of such seniors because a brain that is deteriorating has a hard time making wise decisions.

In between teenage and senility is when the brain is at its peak for good decision making, especially improving as one gets older. Some Eastern cultures venerate their older people as generally being especially wise. After all, it you live long enough, and are still mentally healthy, you ought to make good decisions because you have a lifetime of experience to teach you what future choices are likely to work and which are not.

Much of that knowledge comes from learning from one’s mistakes. On the other hand, some people, especially the young, can’t seem to learn from their mistakes. In any case, the best strategy of all is to learn from somebody else’s mistakes so you don’t have to make them yourself.

Learning from your mistakes can be negative if you fret about it. Learning what you can to avoiding repeating a mistake is one thing, but dwelling on it erodes one’s confidence and sense of self worth. I can never forget the good advice I read recently from, of all people, T. Boone Pickens, who has lost and regained fortunes several times. He was quoted in an interview as saying that he was able to re-make his fortune on multiple occasions because he didn’t dwell on the failures. He credited that attitude to his Oklahoma State basketball coach, who told the team after each defeat, “Learn from your mistakes, but don’t dwell on them. Learn from what you did right and do more of that.”

A key reason seniors make better decisions is that they have a richer store of knowledge and experience. Any choice among alternative options is affected by how much information for each option the brain has to work on. When the brain is consciously trying to make a decision, this often means how much information the brain can hold in working memory. Working memory is notoriously low-capacity, so the key becomes remembering the sub-sets of information that are the most relevant to each option. People are more likely to remember items they value and to forget low-value items.[1]

It turns out, apparently, that older people are more likely to remember the most useful information and thus make better conclusions and decisions. The National Institute of Aging began funding decision-making research in 2010 at Stanford University’s Center on Longevity. Results of their research are showing how older people often make better decisions than younger people.[2],[3]

As one example, older people are more likely to make rational cost-benefit analyses. Older people are more likely to recognize when they have made a bad investment and walk away rather than throwing more good money after bad.

A key factor seems to be that older people are more selective about what they remember. For example, one study from the Stanford Center compared the ability of young and old people to remember a list of words. Not surprisingly, younger people remembered more words, but when words were assigned a number value, with some words being more valuable than others, older people were better at remembering high-value words and ignoring low-value words. It may be that older people selectively remember what is important, which could explain why they make better decisions.




[1] Castel, A. D., Rhodes, M. G., McCabe, D. P., Soderstrom, N. C., Loaiza, V. M. (2012). The fate of being forgotten: Information that is initially forgotten is judged as less important. Quarterly Journal of Experimental Psychology, 65, 2281-2287.
[2] Samanez-Larkin, G.R., Wagner, A.D., Knutson, B. (2011) Expected value information improves financial risk taking across the adult life span. Social Cognitive and Affective Neuroscience, 6(2), 207–217
[3] Carr, Dawn (2013). Why older minds make better decisions. Forbes. http://www.forbes.com/sites/nextavenue/2013/04/29/why-older-minds-make-better-decisions/

For more good advice on improving learning and memory abilities, see Dr. Klemm’s new book, Memory Power 101, Skyhorse Publishing.

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