If your client or the opposing party is older you may find their decision making is different than those who are younger, according to recent research. How they approach risk differs so what offers they’re willing to make or take may have been different if the case was filed 20 years ago.
When faced with uncertainty people have more difficulty making decisions as they age, according to a study by Yale School of Medicine researchers reports Science Daily. They also found older people are more risk-averse than those in their midlife when choosing between potential gains, but more tolerant of risk when choosing between potential losses.
Cognitive function normally improves during adolescence, peaks in adulthood and declines with age, but changes in decision-making across a lifespan haven’t been the subject of much study. Researchers recruited 135 healthy participants between the ages of 12 and 90 for the study on decision-making functions and how they change across a lifespan by measuring viewpoints about risk and ambiguity.
Older People Make Decisions Differently
- Participants made 320 choices in gain and loss trials.
- Participants in gain trials chose between a certain gain of $5 and a lottery that differed in the amount of a possible gain. Loss trials were identical, but the amounts were losses, not gains.
- One example is a participant had to choose between losing $5 and equal chances of losing $8 or losing nothing.
- These tests allowed researchers to estimate attitudes towards known and unknown risks. Each situation was repeated several times and the test design also allowed investigators to estimate how consistent the participants were in their choices.
Generally older adults’ decisions resulted in the lowest expected monetary outcomes, compared to midlife participants, even those in the best of health. Elders had profoundly compromised decision-making, and thoughts about risk showed changes across the lifespan.
Researchers stated there’s a general assumption that those of any age making decisions have the right to do so and are able to make decisions to best benefit their welfare. That assumption may be misplaced for older people even those in apparent good health.
People are overall more motivated by limiting losses than enjoying gains. This study shows that as we age we’re willing to risk more to lose less. Depending on your older client’s negotiation position and what offers are on the table you may see this at play. Even though you fully inform your client about the positives and negatives of a proposal, an older person may be hard wired to make a decision to be more risk tolerant to avoid a loss.