The concept of age has undergone a shift from a non-specific measure of chronological age, to an identification of underlying biological, psychological and functional factors leading to age-related changes over time. Loss of neurons (atrophy) and cognitive decline in healthy aging fit well in to this age paradigm. The aging brain is thought to undergo functional shifts in information processing in response to atrophy, which is conceptualised as a “Compensation Hypothesis” of cognitive aging. Using behavioural (reaction time, variability measures, and accuracy on the n-back task of working memory), structural (stereological cortical volume estimates) and functional (functional Magnetic Resonance Imaging) approaches, this study documents decreased whole brain, prefrontal and dorsolateral prefrontal cortex volumes in older individuals. Further, slower, less accurate, and more variable performance on the n-back task in older participants was accompanied by a posterior-to-anterior shift in processing, confirming the Compensation Hypothesis of cognitive aging. The behavioural data combined with structural and functional findings, suggest an aging brain that neuropsychologically compensates over time by paradoxically placing further processing demands on a structurally compromised dorsolateral prefrontal cortex. This produces adequate but slower, more variable, and less accurate performance compared to younger brains; compensation occurs in age, but is not complete. Decision making research has pointed to the important role of emotion in judgement, and has implicated the orbitofrontal cortex as critical for this processing modality. The structural data in this study showed preferentially less volume in the dorsolateral prefrontal cortex, but maintained cortical volume in the orbitofrontal cortex with age. Younger individuals took longer and maintained their accuracy with increasing complexity during the n-back task, with older participants decreasing their accuracy but not to the level of chance with increasing task complexity. As such, decision making on the n-back task may have shifted with age from the pure processing power of the structurally compromised dorsolateral prefrontal cortex to increasing reliance on emotionally-guided decision making inputs mediated by the intact orbitofrontal cortex resulting in adequate but not fully compensated performance in older people. These findings are discussed in relation to evolutionary pressures on the human working memory system, Hume’s concepts of reason and the passions, and to the emerging field of neuroeconomics. / Graduate