The positivity effect and its influence on financial decision-making ability.
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This research examined the relationship between the positivity effect and financial decision-making ability. The positivity effect refers to an attentional bias observed in older adults for positive over negative stimuli in cognitive processing. Previous research on this topic has focused on the positivity effect’s influence on visual attention and memory for emotionally valanced material. However, few studies have examined the relationship between the positivity effect and decision-making ability. It is possible that older adults focus too much attention on the positive aspects of financial decisions and therefore, overlook important negative information. This study used eye tracking technology to determine if there was a relationship between visual attention and age-related financial decision-making. Older and younger participants first read financial information related to three made-up charities, then viewed happy and sad images associated with the charities. At the end of the experiment, participants were asked to allocate play money to each charity. Results showed a positivity effect in terms of looking time at the images, so that older participants spentmore time looking at the positive images and less time looking at the negative images than younger adults. However, charity giving in both groups was not statistically different, indicating that greater attention to positive stimuli did not detrimentally affect charitable behavior. Interestingly, while elderly participants showed no correlation between looking time and giving rates, this correlation was negative for younger adults – that is, greater looking times were correlated with smaller donations to that charity. Overall, results provide evidence that the positivity effect,while robust in measures of visual attention, may not affect real-world financial decisions.
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