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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."
...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
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.
Actually, it's not a good or service that the EMH refers to, but rather the market price of publicly-traded equities, bonds and commodities in an environment in which there are relatively low transaction fees. You should read more here before posting about it, although since you got a rating of "5" maybe only cursory knowledge is required?
how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?
Well, the electorate chooses the legislators, and they are supposed to be chosing those of a finer clay to govern.
When our name is on the back of your car, we're behind you all the way!
The Keynesians do have one strong point in their favor: there's a lot of evidence that Keynesian spending helped during the Great Depression. I mean, look at what happened to the national debt during WWII, when the US managed to crawl out of the mess they were in:
http://upload.wikimedia.org/wikipedia/commons/3/3b/USDebt.png
Bush and Obama haven't gone anywhere remotely near where FDR went to finance that war.
The EMH supporters, on the other hand, have not had their theories demonstrably having the effects they expected.
Of course, there's another way of looking at this: all software sucks, all hardware sucks, all economic theories suck. We haven't come remotely close to figuring it out.
I am officially gone from
FDRs policies did not get us out of the Great Depression (which was only called that in the US).
By the standard definition of a depression (a period of rapid economic contraction) the depression ended in 1933, as by that year the economy was growing at an inversely proportional rate to it's decline between 1929 and 1933. High unemployment still remained for many years, but news job can only be created so fast. 1929 was the peak of a giant credit bubble, which was similar in size to the credit bubble that burst in 2008. It's only logical that it took many years for jobs to recover, as much of the wealth right before the bubble burst was credit based, i.e. *fake*.
The current bubble collapse we're experiencing was caused by policies provided by Jimmy Carter and Bill Clinton (under a Republican congress). So at least there I agree with you.
Nonsense. Carter had nothing to do with it. The Gramm-Leach-Bliley Act of 1999 is primary catalyst of the 2008 credit bubble. Clinton is certainly responsible for signing it. Even Greenspan, one of the primary drivers behind the free-market mania of the 90's admits today that it was a giant mistake.
I don't always use unix-like operating systems; but when I do, I prefer FreeBSD.
Nobody ever got rich by spending more money than they have.
Lots of bankers would disagree.
Or you could get really incredibly radical and try injecting the stimulus at the bottom of the socio-economic scale for a change. That, somehow, never gets tried.