Why your 25-year-old self and your 75-year-old self would bet very differently.
We make thousands of decisions every day, from what to have for breakfast to whether to invest in a new opportunity. Many of these choices involve a hidden calculation: the balance between immediate reward and long-term consequence. It turns out, our ability to navigate this balance changes dramatically over our lifespan. New research is revealing that the very machinery of decision-making—a blend of logical reasoning and gut-feeling intuition—evolves as we age, with profound implications for our financial, social, and personal well-being.
To study how we make risky decisions, scientists needed a tool that could mimic real-life choices in a controlled lab setting. Enter the Iowa Gambling Task (IGT), a psychological experiment developed in the 1990s that has become a gold standard in the field.
Participants are presented with four decks of cards (A, B, C, and D) and are given a loan of $2,000 in play money. Their goal is simple: win as much money as possible by turning over cards, one at a time, from any deck. Each card tells them they've won a certain amount of money, but some cards also carry a penalty—a loss of money.
The genius of the IGT is that it doesn't explicitly tell participants the rules. They must learn them through experience, relying on a combination of conscious logic and unconscious, "gut-level" feelings to guide them toward the advantageous decks.
The prevailing theory behind the IGT is the Somatic Marker Hypothesis, proposed by neuroscientist Antonio Damasio. This theory suggests that when we face a complex decision, our body (the "somatic" part) generates physical warning signals—a subtle gut-wrenching feeling, a change in heart rate, sweaty palms—when we consider a bad option. These "somatic markers" are formed by our past experiences and emotions, helping us steer away from detrimental choices without having to laboriously think through every possible outcome each time. In the IGT, a player should start to get a "bad feeling" when their hand hovers over Deck A or B, even before they can consciously articulate why.
One of the most illuminating studies in this area was conducted by a team led by Natalie L. Denburg in 2005, which directly investigated how healthy older adults perform on the IGT compared to younger adults .
The experiment was designed with careful controls:
The results were striking. While the younger adults learned to avoid the "bad decks" over the course of the game, a significant subset of the older adults continued to choose disadvantageously.
| Participant Group | Average Net Score (out of 100) |
|---|---|
| Younger Adults | +18.5 |
| Older Adults | -2.1 |
A positive score indicates a preference for good decks. The older group's near-zero score shows they failed to develop a consistent strategy for choosing advantageously.
| Deck Type | Younger Adults | Older Adults |
|---|---|---|
| Good (C&D) | 65% | 48% |
| Bad (A&B) | 35% | 52% |
By the end of the game, younger adults were choosing the good decks almost 2-to-1, while older adults were still selecting slightly more often from the bad decks.
This study provided strong evidence that the decision-making process can decline with age, even in the absence of dementia. It suggested that the brain's ability to form and use emotional signals (somatic markers) to guide behavior may be compromised in older adulthood. This isn't about a lack of smarts, but a potential change in the neurobiological tools used for learning under uncertainty .
To conduct research like the Iowa Gambling Task study, scientists rely on a specific set of tools and concepts.
The core behavioral paradigm that simulates real-life decision-making under uncertainty, measuring the learning of reward/punishment contingencies.
Measures subtle changes in sweat gland activity on the skin, a key physiological indicator of the emotional, "somatic marker" response to risky choices.
A series of standardized tests (e.g., for memory, attention) to ensure participant groups are cognitively healthy and to rule out other explanations.
Used in related studies to pinpoint which brain areas are active during the task, linking behavior to brain function.
Provides a baseline of "normal" performance against which to compare the experimental group, ensuring any differences are age-related.
So, what does this mean for us? It's a nuanced picture. While older adults may struggle with the type of decision-making required by the IGT, they often excel in other areas, such as emotional regulation and resolving social conflicts—often called "crystallized intelligence." The challenge of the IGT is that it requires learning new, abstract rules in an uncertain environment, a skill that relies heavily on brain regions that can be vulnerable to age-related changes.
Understanding this age-related shift is crucial. It can help families and financial advisors better support older adults in managing investments and avoiding scams.
It reminds us that effective decision-making isn't just one skill, but a suite of tools that change over time. The next time you face a tough choice, remember: you're not just using logic. You're also listening to the whispers of your past, a voice that itself evolves with every passing year.