Comments and Discussion

摘要

Those whom the gods love die young. Yet we grow old always learning new and interesting things. This paper by Sumit Agarwal, John Driscoll, Xavier Gabaix, and David Laibson does some justice to both these statements. And like all good economic papers, it identifies a trade-off. You can be young and foolish: at the peak of your cognitive abilities, but also very ignorant. Or you can be old and a bit slow: having accumulated a lot of experience, but with depleted analytical capital. In the middle is an "age of reason" at which you have learned enough and are still able to exploit your experience and to process new information. The paper argues that these dynamics are reflected in a life-cycle pattern of financial mistakes and performance. Its findings are relevant from a policy perspective, especially given the continuing aging of the population in most advanced economies. But I suspect they will be intriguing (and a bit scary) even for those who are not particularly interested in economic policymaking or behavioral finance.