Getting Older Isn't All That Bad
Better Decisions and Coping When Facing "Sunk Costs"
Published in: Psychology and Aging, v. 29, no. 3, Sep. 2014, p. 642-647
Posted on RAND.org on September 01, 2014
Because people of all ages face decisions that affect their quality of life, decision-making competence is important across the life span. According to theories of rational decision making, one crucial decision skill involves the ability to discontinue failing commitments despite irrecoverable investments also referred to as "sunk costs." We find that older adults are better than younger adults at making decisions to discontinue such failing commitments especially when irrecoverable losses are large, as well as at coping with the associated irrecoverable losses. Our results are relevant to interventions that aim to promote better decision-making competence across the life span.