Teenagers are known for being hormonally charged, moody and more often than not irrational in their behaviour.

But a new study suggests that we've got them all wrong - especially in terms of how they handle their finances.

Research carried out by Duke University in North Carolina has found that that adolescents aged between 10 to 16 years old can be more rational in their economic choices than many older young adults.

Weight of the world on her shoulders: Teenagers are known for being hormonally charged, moody and more often than not irrational in their behaviour. But a new study suggests that we've got them all wrong - especially in terms of how they handle their finances

The study suggests we should give teenagers more credit for being rational but that parents still need to help children hone their money skills in making real-life decisions.

'The new results point to the idea that we should not think of adolescents as being irrational,' said study author Scott Huettel, a professor of psychology and neuroscience.

'What's different about them is they don't use simple rules as effectively.'

'Simple rules' are the mental shortcuts people use in decision-making such as 'don't drink and drive'. In contrast, teens may more carefully weigh this decision.

'Adolescents are going to be more likely to use cost-benefit analysis than the (simple rules) that adults use. That can get these kids into a lot of trouble,' Professor Huettel said.

Counting the pennies: The study suggests we should give teenagers more credit for being rational but also that parents should help children hone their money skills in making real-life decisions

In the study, participants were presented with three scenarios - labelled A, B, and C - and asked to pick the best one.

Each scenario contained a set of outcomes that could lead to winning or losing different sums of money.

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For example if the teenager picked scenario A, they had a one-third chance of winning $6, one-third chance of winning $4, and a one-third chance of losing $4. Scenarios B and C each came with their own chances of winning or losing three different sums of money.

Young adults - aged 22 years old on average - used simple rules. As they completed more trials, they 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.

'I was surprised by how consistent the effects were,' Professor Huettel said. 'Pretty much everywhere we looked, adolescents were the ones who [were] more economically rational.'

Tracking the participants' eyes as they completed the task also gave clues about how they were processing the information.

Adolescents consistently viewed almost all the possible outcomes of their choices throughout the experiment.

In contrast, young adults looked at almost everything initially, but as the experiment progressed they started to ignore information that wasn't useful to them. They also spent less time than adolescents viewing each outcome, the study found.

Other research has shown that adolescents aren't necessarily more risk-seeking but that they are more sensitive to good outcomes compared with adults. Teens also place more value in social interactions and approval.

Professor Huettel's group is studying the role of peers in adolescent decision-making, while tracking eye movements and brain activity. This research, and the new study, may inform new ways of coaching adolescents to make smarter decisions, Professor Huettel said.