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Updated: May 24, 2026
13:04
Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
Published on: September 19, 2012
Children base their investment on calculated pay-off
Sophie Steelandt1, Valérie Dufour, Marie-Hélène Broihanne
1Centre National de la Recherche Scientifique, Département Ecologie, Physiologie et Ethologie, Strasbourg, France. sophie.steelandt@iphc.cnrs.fr
Plos One
|March 14, 2012
Summary
Children develop economic decision-making skills between ages 3 and 10. Most 7- and 10-year-olds successfully adjusted investments based on offers, unlike 3-year-olds, indicating cognitive and social skill development.
Area of Science:
- Developmental Psychology
- Cognitive Science
- Behavioral Economics
Background:
- Understanding the emergence of economic decision-making in children is crucial for developmental psychology.
- Early childhood is a critical period for the development of cognitive and social skills that underpin economic behavior.
Purpose of the Study:
- To investigate the developmental trajectory of economic abilities in children aged 3 to 10 years.
- To examine how children adjust their investment strategies in response to different exchange scenarios.
Main Methods:
- A controlled exchange experiment was conducted with children aged 3, 5, 7, and 10 years.
- Participants made investment decisions in two conditions: one with a proportional reward and one with a fixed reward.
- Investment amounts were analyzed to assess strategic adjustment based on partner's behavior.
Main Results:
- All 3-year-olds failed to adjust their investment strategies.
- Approximately one-third of 5-year-olds demonstrated adaptive investment behavior.
- A majority of 7- and 10-year-olds successfully adjusted their investments to maximize payoffs according to the exchange rules.
Conclusions:
- Economic decision-making abilities show significant development between 3 and 10 years of age.
- The ability to strategically adjust investments emerges around age 5 and solidifies by age 7.
- These findings suggest a strong link between the development of economic skills and the maturation of cognitive and social abilities after age 4.
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