We examine whether or not older individuals accurately understand their cognitive decline and the potential monetary penalties of misperception. First, we present that older individuals are inclined to underestimate their cognitive decline. We then present that these experiencing a extreme decline however unaware of it usually tend to undergo wealth losses. These losses largely mirror decreases in monetary wealth and are primarily skilled by wealthier individuals who had been beforehand energetic on the inventory market. Our findings help the view that monetary losses amongst older individuals unaware of their cognitive decline are the results of dangerous monetary choices, not of rational disinvestment methods.
That’s from a newly revealed JPE paper by Fabrizio Mazzonna and Franco Peracchi. Listed below are some much less gated variations of the paper.
