Working Paper: CEPR ID: DP10457
Authors: Isabelle Brocas; Juan D. Carrillo; T. Dalton Combs; Niree Kodaverdian
Abstract: Employing a variant of GARP, we study consistency in aging by comparing the choices of younger adults (YA) and older adults (OA) in a 'simple', two-good and a `complex' three-good condition. We find that OA perform worse than YA in the complex condition but similar in the simple condition. Working memory scores correlate significantly with consistency levels. Finally, OA are more prone to use simple heuristics than YA, and this helps them behave consistently in the simple condition. Our findings suggest that the age-related deterioration of neural faculties responsible for working memory is an obstacle for consistent decision-making.
Keywords: aging; complexity; laboratory experiments; revealed preferences
JEL Codes: C91; D11; D12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Older Adults (OA) (J14) | decision-making consistency (D70) |
| Younger Adults (YA) (J13) | decision-making consistency (D70) |
| Age (J14) | GARP violations in complex scenarios (D50) |
| Working Memory (D87) | decision-making consistency in complex tasks (D91) |
| Working Memory performance (D29) | GARP violations in complex tasks (F12) |
| Complex task demands (J29) | working memory recruitment (D87) |
| Simple heuristics (D91) | decision-making consistency in simple tasks (D91) |