Assuming someone gave you the choice of 100 euros today or 150 euros in a year's time. Which sum would you take? Scientists at the University of Bonn and the Institute for the Study of Labour (Institut zur Zukunft der Arbeit, IZA) asked 1000 adults in Germany this question.
At the same time they measured the cognitive abilities of the participants, using two different methods. The result was that intelligent people prefer to wait for a higher return, rather than going for the money now. This is the first time that this relationship between intelligence and patience in financial matters has been shown. Furthermore, the willingness to run risks increases with higher intelligence.
Scientists gave the test subjects 100 euros. The participants could put this amount straight into their pockets. However, they could also invest it for a year at a guaranteed fixed rate of interest. In this way the 100 euros would become, for example, 105, 120 or 150 euros. In an experiment the candidates were supposed to decide what the minimum amount would have to be in a year’s time for it to be worth waiting longer for. The idea behind this was that the more impatient someone is in waiting for payment, the higher the incentive required must be in order for them to accept the 12-month waiting period. Using a similar experiment the scientists ascertained the willingness of the candidates to run risks. Apart from that the test persons completed two different intelligence tests. 'The more intelligent the test subjects were, the more patient and tolerant of risk they were,' is how the Bonn Professor of Economics, Dr. Armin Falk, sums the results up.