Humans Rational and Irrational Buying Behavior Is Mirrored in Monkeys

June 20, 2005

The basic economic theory that people work harder to avoid losing money than they do to make money is shared by monkeys, suggesting this trait has a long evolutionary history, according to a Yale University study under review by the Journal of Political Economy.
This phenomenon, known as "loss aversion," refers to the tendency for people to strongly prefer avoiding losses to acquiring gains. "A large body of studies suggest that losses are more than twice as psychologically powerful as gains," said author M. Keith Chen, assistant professor at Yale School of Management.

In this study conducted with Venkat Lakshminaryanan, a research assistant in the Department of Psychology, and Laurie Santos, assistant psychology professor and director of the Capuchin Cognition Laboratory at Yale, tufted capuchin monkeys were given small disks to trade for rewards—apples, grapes or gelatin cubes. The researchers said capuchins are well–suited subjects for study since they are relatively large–brained primates, skilled problem solvers, and a close evolutionary neighbor to humans.

In their studies monkeys were given a budget of disks and asked to decide how much to spend on apples, and how much to spend on the gelatin cubes, even as the prices of these goods and the size of their budgets fluctuated. Capuchins performed much like humans do. Capuchins, like humans, react rationally to these fluctuations.

In a second experiment, capuchins were asked to choose between spending a token on one visible piece of food that half the time gave a return of two pieces, or two pieces of visible food, that half the time gave a return of only one piece. Economic theory predicts that consumers should not care which of these outcomes they receive since they are essentially both 50–50 shots at one or two pieces of food. The capuchins, however, vastly preferred the first gamble, which is essentially a half chance at a bonus, than the second gamble, which is essentially a half chance at a loss.

“The goal of this work,” said Santos, “is to learn whether other animals share some of our basic economic decision processes or whether human economic behavior is unique to our own species.”

“The economic view,” Chen added, “says people are aware, rational and in control of their major decisions. Social psychology cuts in the opposite direction, maintaining that people are often unaware of the forces that dictate their behavior. We wanted to understand the interactions of these two things. What we’ve shown is that capuchin monkeys look remarkably like us; making rational decisions in many of the same settings that humans get right, but also make many of the same mistakes we make.”

Their work provides an evolutionary spin on the current debate about why Americans do not save enough for retirement or put enough of their savings into the stock market. “Although the stock market offers a better rate of return than investing in safer financial products, such as bonds, people tend to experience stock market fluctuations through the biased lens of loss aversion, a lens that appears to be shared with other primates,” Santos said. Chen added, “We are fighting tendencies that may be biologically hard–wired.”

Source: Yale University

Explore further: Apes make irrational economic decisions – that includes you

Related Stories

Unlike humans, monkeys aren't fooled by expensive brands

December 2, 2014

In at least one respect, Capuchin monkeys are smarter than humans—they don't assume a higher price tag means better quality, according to a new Yale study appearing in the open-access journal Frontiers in Psychology.

A new take on the games people play in their relationships

March 21, 2012

Human nature has deep evolutionary roots and is manifested in relationships with family members, friends, romantic and business partners, competitors, and strangers more than in any other aspects of behavior or intellectual ...

Monkeys choose variety for variety's sake

March 15, 2010

Given a choice between spending a token to get their absolute favorite food or spending it to have a choice from a buffet of options, capuchin monkeys will opt for variety.

Recommended for you

Trade in invasive plants is blossoming

October 3, 2015

Every day, hundreds of different plant species—many of them listed as invasive—are traded online worldwide on auction platforms. This exacerbates the problem of uncontrollable biological invasions.

How much for that Nobel prize in the window?

October 3, 2015

No need to make peace in the Middle East, resolve one of science's great mysteries or pen a masterpiece: the easiest way to get yourself a Nobel prize may be to buy one.

Drone market to hit $10 billion by 2024: experts

October 3, 2015

The market for military drones is expected to almost double by 2024 to beyond $10 billion (8.9 billion euros), according to a report published Friday by specialist defence publication IHS Jane's Intelligence Review.

Fusion reactors 'economically viable' say experts

October 2, 2015

Fusion reactors could become an economically viable means of generating electricity within a few decades, and policy makers should start planning to build them as a replacement for conventional nuclear power stations, according ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.