Academic Eric Johnson explains the impact of intelligence on finances at an Atlanta Fed Public Affairs Forum

 

 

Via Federal Reserve Bank of Atlanta

 

Category: Cognitive Foibles, Psychology, Video

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3 Responses to “Smarter and Less Smart As We Age”

  1. faulkner says:

    Interesting and encouraging, except that increases in age do not equal increases in “crystalline” intelligence. The “fluid” intelligence referred to is another term for the conscious and analytic System 2. “Crystalline” intelligence refers to reflective critical thinking skills that may constitute a System 3. (Keith Stanovich, 2004)

    It’s already been established that developing the fluid intelligence of System 2 takes years of deliberate effort – most often in a formal educational setting. Developing the crystalline intelligence of System 3 is on top of that. The Behavioral Economics experiments with ambiguous construal (e.g. Linda is a bank teller) are testing for this kind of higher level thinking. Also, the research shows it tends to be restricted to the domain in which it was learned.

  2. faulkner says:

    “Crystalline” intelligence is also known for having the quality of perspective. Alan Kay, famously of Xerox PARC and the Dynabook, noted, “Perspective is worth 80 IQ points.”

  3. rd says:

    I think there are important points here that are not being addressed enough in the discussion of the definition of “fiduciary” going on between the financial industry and the regulators. One of the key periods when people need financial advisors in a fiduciary role is in their de-accumulation phase after retirement as their cognitive abilities are likely to deteriorate. This a prime period for the sharks to circle and attack as there are assets to go after with the person holding the assets potentially not having the cognitive abilities they had when they were accumulating the assets.

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