Planning to save money but cannot? Don’t worry and ask for help from your child.
Don’t be shocked as it’s time to start listening to your kids as a new study has revealed that adolescents between 10 to 16 years of age are more economically rational than young adults.
The study suggested that parents should help children hone their cost-benefit analysis skills in making real-life decisions.
Author Scott Huettel of the Duke University said new results pointed to the idea that people should not think of adolescents as being irrational.
Huettel added that adolescents were more likely to use cost-benefit analysis than the adults use.
Research
In the study, the participants were presented with three scenarios: A, B and C and were asked to pick the best one. Each scenario contained a set of outcomes that could lead to winning or losing different sums of money.
Young adults counted the number of wins and losses in each scenario and picked the one with the most wins, ignoring the dollar amount of each potential gain or loss.
Adolescents, on the other hand, accounted for the magnitude of the potential win or loss and chose scenarios to minimise loss.
Result
Huettel said that pretty much everywhere they looked; adolescents were the ones who looked more economically rational.
Adolescents consistently viewed almost all the possible outcomes of their choices throughout the experiment.
The study found that young adults looked at almost everything initially, but as the experiment progressed they started to ignore information that wasn’t useful to them.
Huettel concluded that the new study might inform new ways of coaching adolescents to make smarter decisions.
(with ANI inputs)