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Monkeys Exhibit the Same Economic Irrationality As Us
grrlscientist writes "Laurie Santos is trying to find the roots of human irrationality by watching the way our primates make decisions. This video documents a clever series of experiments in 'monkeynomics' and shows that some of the stupid decisions we make are made by our primate relatives too."
mistook the legislature for a barrel of monkeys
Been there, done that, paid for the T-shirt
and didn't get it
So you have four monkeys with bananas, and they give their bananas to the first guy, right? Then the four monkeys each look to recruit four more monkeys, and get their bananas...
So they buy Apples too, huh?
Yeah, I think I saw a monkey holding a phone in a weird fashion the other day.
And another monkey reading a book on objective C.
Save your wrists today - switch to Dvorak
Now they need a stimulus plan to bail out their Banana Bubble, but the Gorillas are opposing it.
Table-ized A.I.
There is no summary anywhere except for an enticing lure. Must watch an 18 minute video clip. They all expect you to make an irrational decision to watch the video and the ads it looks like.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
What a coincidence, just the other day I saw a monkey throwing and eating it's own feces.
Monkeys exhibit the same economic irrationality as we [do].
There are no karma whores, only moderation johns
considering how little of what we do is rational instead of basically blind copying like monkeys ways of express ourselves, tastes, and how we look and behave. Isolated individuals could take some rational choices, but the big mass will just follow the community.
You ever see a monkey with a Zune?
__ Someday, but not this morning, I'll finally learn to use the preview button.
yeah, but they don't suck cock like you do.
Monkey see monkey do!
Do they also propose we have to colonize Mars and "get off this rock"? That would explain Space Nuttery on a neurological basis. Maybe we can even find a cure for it!
I think one significant difference between humans and monkeys, is that if you convince monkeys that little tokens can be traded for grapes, but then "suspend convertibility", they will go -- pardon the term -- apeshit.
In contrast, if you convince humans that their paper banknotes can be redeemed for an indicated quantity of gold and then suspend convertibility, they handle it pretty well.
I'm in talks with some central banks to try the experiment again...
Information theory is life. The rest is just the KL divergence.
Many of the economic theories that our governments have been adhering to over the past few decades have as a core premise that overall, markets behave rationally. Specifically, the "Efficient Market Hypothesis", in which it is proposed that the price for a good or service ALWAYS reflects ALL available information, implicitly assumes that market actors are acting rationally. And the "Efficient Market Hypothesis" is at the core of most of the mind-blowing mathematical economic models that many of our society's decision makers use to make economic decisions. The question is: If humans naturally make irrational decisions because we are biologically predisposed to do so, then how can markets be assumed to behave rationally? There have been striking experiments done on seemingly rational MBA students in which they make staggeringly irrational economic decisions. The monkey experiments seem to reinforce our predisposition to act irrationally.
In other words, the above research points towards falsifying the primary economic ideology that has been used to govern America since Reagan. This is no small matter. It affects all of our lives. And yet, if you listen to Republicans lately, they are still calling for policies derived from these economic models, policies such as tax cuts for the rich, working towards a reduction in governmental economic power, so as to let the power of the private sector and the magical invisible hand of the market place work their economic miracles. Myself, I am more of a Keynsian. I think the market is useful, but it can run amok if not attended to by a government powerful enough to guide it towards the public good.
Here is an excellent episode of the TV series Nova called "Mind over Money", which lays out many of my arguments clearly. The video only streams to the US.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
They used a fiat currency as well?
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Modern economic research shows that human beings are not primarily motivated by self interest, but by ideals of fairness and reciprocity that benefit the species as a whole. What is rational for the individual may not be what is rational for the species, and vice versa. Evolution operates on more than just an individual level, in fact what makes an individual "more competitive" in a simplistic sense might not be what gets selected for. For instance, those feelings of fairness and reciprocity most of us have. In an experimental game called the Dictator game, one person is given a large sum of money. They can give all to none of it to player B. What they do give is multiplied by a small percentage and then person B can give all to none of it back to person A, but the gift is again multiplied. Well, rational actor theory says the most rational choice for each individual is to keep ALL the money given to them. The most rational act for the species in general is for person A to give all the money to person B, and person B to give a proportional amount back, because this maximizes gains for the species as a whole. And, surprise surprise, this is close to what most people do, exchanging not all but a large chunk of the money and increasing overall reward.
Also, given imperfect information about the world, perhaps just doing what has worked up until now for your ancestors is not a bad strategy in general, especially for the less intelligent.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Humans and monkeys both display two traits: A) Relativity and B) Loss Aversion
Relativity was a known. Slippery slopes work in this way. Changes are usually only compared to the immediate past, rather than on the whole.
Loss Aversion seems natural, too. We take bigger risks when losses are involved than we do gains.
So in the end it isn't necessarily noteworthy that these phenomena exist, rather that both species display the traits of them.
Next time someone says we are stupider than monkeys, I'll respond with an emphatic "No true. We exhibit the same economic irrationality an monkeys, thus putting us on the same level."
...here's my assesment:
First of all, you need to skip to minute 9 before you start getting any info. And if you read the book Super Freakonomics, you already know everything in the 20-minute video:
- Monkeys steal money from each other, as do humans.
- Monkeys are terrible savers, as are humans.
- Monkeys are poor calculators of risk/reward, as are humans. (She goes on for about 8 minutes belaboring this point.)
And the goal for us as humans is to use our logic to overcome our emotions. There, I have now saved you 20 minutes of your life!
She published this in 2006.
Chen, M. K., Lakshminaryanan, V. & Santos, L. R. (2006). The evolution of our preferences: Evidence from capuchin monkey trading behavior. Journal of Political Economy, 114(3). 517-537
She seems to think that the 'sure thing' is always smart and that risks are always 'mistakes'. She must really like making 1% on her savings account. Wealth is not generated that way, nobody has ever been outstandingly successful by generating 1% growth. Human civilization is built on risks, and individually those have sometimes raised people up and sometimes dragged people down, but to categorize that behavior as 'stupid' or a 'mistake' is to spit upon the whole of human endeavor. But of course this makes me a sub-human fat-cat corporatist, so be sure to ignore me while I reap the rewards of more risky investments. Those were just stupid mistakes after all that just happen to defray my cost of living.
I support the Slashcott and will not be reading or commenting from 2/10/14 to 2/17/14. Beta is steaming pile of dog shit
The s-word seems ever more scary lately?
One that hath name thou can not otter
I love reading about an experiment in which a question is posed and then the reults are interpreted strictly within the context of that specific question without considering other possible explanations for the observed behavior.
In this case, the guy on the left always cheated while the guy on the right sometimes cheated but sometimes completed the trade as advertised. So why isn't the conclusion that monkeys have a sense of fair play? So they choose not to deal with the guy who always cheats. Or maybe the conclusion is that happy outcomes are remembered for longer than unhappy ones, so that the monkey's memory says that dealing with the guy on the right produces a better outcome more often?
Failing to consider other explanations seems ... well ... irrational.
So you're saying these monkeys have gone through a primal Great Depression too? We should totally start watching what they do to rebuild society.
Is that a female Weird Al in the embedded clip in the article?
You never expect irony, do you?
Want to be a professional wrestler? Visit www.iyfwrestling.com
@iyfwrestling
Although come to think of it, I do wonder how many bananas Best Buy get's for a crappy Sandisk MP3 player w/ 3 year extended warranty....
Nah. That would require me to RTFA.
*** Sigs are a stupid waste of bandwidth.
What a coincidence, just the other day I saw a porn star throwing and eating her own feces.
I don't have any primates! I must have behaved irrationally and spent my primates unwisely. Do any of you still have your primates? Give yourself a pat on the back if you do. You have exhibited excellent economic sense.
http://www.acetonestudio.com
Mayeb the monkeys had a monkey government that printed up currency constantly so that their savings would actually lose them money, due to monetary inflation?
No. The decisions you think are "irrational" are often in fact VERY rational - based on a 'wider' world.
For example, the gambling thing does not consider TRUSTWORTHYNESS.
Taking the gamble that the odds say is good, assumes the odds are accurate. Once you understand that the gamble may be a con and the gamble may be fake, then YES, you should treat the 50/50 chance to gain as less interesting than the 50/50 chance to lose.
This means the the 'absolute" bias, and Loss Aversion are NOT stupid irrationalities, but in fact a logical decision due to the knowledge that people are liars and cheats.
excitingthingstodo.blogspot.com
You can instead write:
Monkeys, like humans, care more about themselves, than about society, and so will steal.
Monkeys, like humans, understand that despite the claims of absolute security, there is ALWAYS more risk than stated, so saving has some additional costs and is LESS valuable than the economicist think (i.e. among other things, there is always the chance you will die before your savings are used).
Monkeys, like Humans are GREAT calculators of risk/reward, as they take into account the man, many unspoken risks that are not offered by the salesman, thus affecting our calculcations in ways the idiot economicists fail to understand (such as taking into consideration the chance that we, or the bank may fail to live up to it's contract so the 5% interested paid today is worth more than the 10% interested paid next year, while the 10% cost to us now is worth less than the 5% cost paid next year.
excitingthingstodo.blogspot.com
Monkeys Pay for Sex
It goes without saying that we're talking about male monkeys.
-kgj
And that post is a great example of how you can appear to discredit something in order to advance an unrelated agenda, by simply making stuff up. Good job.
This behavior must serve some purpose. I doubt it's irrational in the grand scheme. I think we just don't understand what that scheme is.
It obviously had some use at some point or maybe even now.
So what I'm saying is that the behavior was selected for a reason and we should try to figure that out rather than potentially waste time figuring out how to suppress it.
Try again, this time understanding what I said. The video in question spends about 15 minutes (about 10 at the beginnin and another 5 at the end) making value judgements, saying how both monkey and human, makes 'irrational' decisions. I contest these conclusions and do so without any other agenda. I am stating a simple fact that they failed to take into account - neither the monkeys nor human test subjects can possibly make the single assumption that they are basing their entire study: the odds are stated corectly. My contention is simple - that even monkeys realize that just because someone claims the odds are X does not make them true, and that the so called irrationality of their decisions is actually a rather logical, rational attempt to deal with what experience has taught us all are the true odds. Humans and monkeys ALWAYS account for greater risk than stated, particularly when someone may be making a profit, but less so when someone is engaged in an act of charity.
excitingthingstodo.blogspot.com
Apparently a monkey will make terrible human-like decisions, one decided to host the YouTube clip. Zing!
Best Buy usually sells things at cost and makes the money on the services, warranties and peripherals. When I worked there I used to get 70-80 percent discounts on cables, and other peripherals like mouse pads, microphones, ect. On bigger ticket items or video games Id get no discount or something in the ballpark of 5 percent.
That brings me to an interesting point, / . is just "the ramblings of socially-inept, technology-literate news-mongers".
First saying that individual can't make rational decision and so the whole market cannot be rational is like saying each of your brain cell has no intelligence and therefore you are stupid.
Then the "bubbles" (which is more of an emotionally charged word used by the people and in the media than a concrete economic definition) crash eventually is a proof that the Efficient Market Hypothesis works? The theory does not say prices won't frustrate. In fact, after the "bubbles" and "panics" of a certain commodity, prices of that commodity will become stabilized for a long time, while bubbles/panics may arise on some other commodities. If there is a problem with the above theory, it is that it's not very useful by not being able to predict the details of what, when, where, how and who. In this sense, it suffers from the same limitation of many other stochastic theories like the theory of evolution: true but not that useful for you.
I call it the "water balloon effect". Regulating the economy is sometimes necessary to prevent monopolies and whatnot. But the real problem comes when you try and manage it from a top-down angle. The later is like putting a squeeze on a water balloon. It should not surprise you when it bulges back out on both ends of your fist. If you keep playing this game with many hands, the whole damn thing gets distorted, unpredictable and unstable. Eventually, it will pop!
To this day, that's how government has shaped our economy.
Life is not for the lazy.
And the goal for us as humans is to use our logic to overcome our emotions. There, I have now saved you 20 minutes of your life!
Actually I find the TED talks are usually quite entertaining and this was no exception. I found the details of the experiments and how those concepts were tested were well worth 20 minutes.
These posts express my own personal views, not those of my employer
The reason humans, and possibly higher primates, make suboptimal decisions is because we're generally optimistic. That's why we buy lotto tickets, play the market, and try out our ideas in new business ventures. One guy succeeds, the rest try but fail, and the world grows as a result. We would have no civilization, no economy, nothing, if it weren't for our suboptimal decision making.
This is sort of a misrepresentation of the talk. The "Take home message of the talk" (as she says at 16:47) is that the choice to take risk differs on whether the situation is perceived as a gain or a loss -- regardless of the risk/reward being exactly the same in each case. When presented with the option of either (a) 2 grapes, or (b) 50/50 chances for either 1 or 3 grapes:
- Monkeys take the safe choice (a) in a gain situation, i.e., start with 1 grape and possibly add some more later,
- Monkeys take the risky choice (b) in a loss situation, i.e., start with 3 grapes and possibly take some away.
That being the same as humans tend to do on analogous tests. My personal interpretation is that negative numbers are actually a very sophisticated, hard thing to deal with for most people. Most of the time in a natural community you'd be taking actions to gain things -- the "loss" scenario is somewhat artificial and abusive, and we're not set up naturally to deal with that well.
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
Others have already pointed out the problems with your history of the Great Depression: the depression ended years before the war started.
But to the extent that WWII also benefited the economy, "pulling millions of men out of the labor market" isn't where the benefit came from. At best, that would have superficially improved the statistics. The economic benefit of WWII came from stimulating demand: suddenly we were spending billions on tanks, planes, etc. that we hadn't been spending before. That grew the industries that made those things, putting money in the pockets of their workers, which they then put back into the economy.
This, however, is an egregious mistake:
Nobody ever got rich by spending more money than they have.
Are you saying you've never heard of anyone taking out a loan to start a business, which eventually pays off the loan and provides a healthy stream of profit?
You've never heard of anyone taking out a loan to go to college, learning skills that they use to get a higher-paying job, eventually paying off the loans and keeping the increased income?
Surely you've at least heard of war bonds, which the government used to borrow money it didn't have and spend it on the war that you believe brought us out of the depression!
Visual IRC: Fast. Powerful. Free.
If half food is just a lethal as no food, screw it. I'd rather be risky when my survival depends on having enough food. I'm a pretty smart monkey.
Yes it's not that way in modern society, but I figure the species will get over it in time for the sun to explode. Then what? We'll be saying "we can get almost far enough away and hope there's some random alien to save us in the bleakness of the void, if we survive"
Often wrong but never in doubt.
I am Jack9.
Everyone knows me.
As we all know, it doesn't just work for Banana Republics, Trust Busting works for the US Too Big To Fail firms.
That much we can learn from monkeys.
They also like to hoard bananas like Sen. Ted Stevens did, and take other monkey's bananas for their own private gain.
Which they return in the form of poop.
-- Tigger warning: This post may contain tiggers! --
Actually, negative numbers are lies invented by mathematicians. Have you ever seen -1 dollars/grapes? No, just some schmuck/monkey reduced to depending on charity/government/researchers to avoid starvation. That is why normal people/monkeys usually work off of the logarithm of the final result, not the linear value.
I enjoyed that greatly. Here's either 1 or 3 grapes for the effort.
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
sure, you're but you're not nearly as entertaining
People do not understand money. They think it is magical, or that it is only worth something if it is a precious metal (this is mostly a western obsession).
They do not understand money is just a theoretical construct, a means of facilitating trade and as such it doesn't matter what the money is so long as everyone agrees on using it.
While precious metals have a long history in western culture there have been plenty of other things: teeth, big rocks, etc. It all works.
Likewise, a currency can be totally virtual and work just fine. It can be all bits in a computer, with nothing in the real world backing it, so long as people agree upon its use.
In the 1950's before he went on to find fractals Benoit Mandelbrot disproved the efficient market hypothesis based on its mathematical consequences. Basically, you expect gaussian distributions for a lot of things if the efficient market hypothesis is in operation and when you look at the real world you find other kinds of distributions. Hence, the efficient market hypothesis is nothing but a fantasy. This means there is no point to studying economics as the basic premise of nearly all non nutter theories is experimentally proven to be wrong.
It's not that they're as dumb as us, it's that we're as dumb as them.
All this experiment shows is that the monkeys are willing to accept more risk under certain circumstances. At no time does a monkey behave irrationally (such as buying two grapes when they could have three grapes). Also, the experiment does not reflect real market conditions. Consumers usually have a much more accurate idea of what they are going to get for their money. But people are drawing all sorts of goofy conclusions from the experiment, "there are no rational actors", "economic models are all wrong", "the East Germans knew the right way to run an economy", etc.
I intend to fully endorse and support this research, just so I can say "monkeynomics" a lot.
Michael Coyne
http://turthalion.blogspot.com
A is holding 1 grape and B is holding 1 grape. A says: I'll give you 2 grapes. B says maybe I'll give you one grape, maybe I'll give you three.
Obviously, there are not three grapes visible. B is lying, whereas A intends to give me his grape and B's grape. I choose A. It doesn't matter what they actually do after the choice is made (maybe B was hiding two grapes), what matters is what is rationally available. If a Nigerian Prince tells me he just inherited billions of dollars but need _my_ help to get it, my "rationally available" alarm bells go off, just like when I can only see two grapes. When you enter into a hand of poker, you ante-up to show you're good for some gambling money.
If they are both holding more grapes, then 3 grapes do exist, and the chance for 3 grapes raises from 0/2 to 1/2.
- Monkeys are terrible savers, as are humans.
Sadly she makes that claim without any evidence. The purpose of saving is to accumulate greater buying power, but the monkey's were only allowed to exchange ONE token for a purchase. If a monkey learned it could purchase a grape dispenser with 100 tokens, THEN you would potentially see some savings behavior.
However that option was never afforded them, so the experiment does not offer any basis of claim on monkey savings.
I can tell you as a kid, when my friends spent their allowances on candy and disposables, I saved mine for a month and bought a CB radio I wanted. To this day I save excessively and have afforded myself what I've wanted by virtue of it. When she asked what I'd do with $1000? My first thought was toss it in the bank, I'd have her $1500 in a couple decades, or have doubled it in 35 years.
But her comparisons are a fallacy over time. A 50% chance of doubling your money averages out to 1.5 over time, as any professional poker player can tell you. When she asked which to choose, I thought, it's irrelevant, they are both equatable in the long run.
But she ignores emotion, which obviously both monkey's and we make decisions by predominantly. 100% of the time the choice was to avoid potentially feeling bad (whether for a 0% gain or some amount of loss).
Since feeling badly has greater value/is more significant than monetary gain/loss, I'd suggest we make the right choice.
Only to those of us that actually contribute to society instead of leach.
"In God We Trust, All Others Pay Cash"
Yes, yes, yes, yes...if we could only get rid of them, if only they could be removed from our wonderful civic society...
One that hath name thou can not otter
not government, more like private banks under government acceptance, via the system known as fractional-reserve banking.
comment first, facts later. http://chem.tufts.edu/AnswersInScience/RelativityofWrong.htm
And some on Wall Street understood this phenomenon and exploited it. Enriching themselves while destroying the economy.
"You'll get nothing, and you'll like it!"