A team of neuroscientists from Stanford University has discovered an interesting “financial risk” asymmetry between younger and older people. While both young (age 19-27) and old (age 65-81) people have more or less the same brain region activation for anticipating monetary gain, older adults don’t have as much activation while anticipating monetary loss. This group from Professor Brian Knutson’s lab tested adults with a simple task in which they respond to a cue and either gain or lose money. The test is accompanied by a subjective rating where the subject can tell how they feel about their gain or loss.

This leads to some interesting implications for financial planning and decision making in older adults. It might also help explain why older people are more susceptible to fraud - because they can’t anticipate and react to the possibility of financial loss in the same way that adults can.

Reference:

Samanez-Larkin et al. Nature Neurosci 10(6), 787-791 (2007).