Consistency in Simple vs. Complex Choices over the Life Cycle

Juan D. Carrillo, Isabelle Brocas and T. Dalton Combs

No 10457, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 (search for similar items in EconPapers)
JEL-codes: C91 D11 D12 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-age, nep-exp and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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