Behavioral economics of Capuchin monkeys!

This is a bit tangential to our course, but for those of you interested in behavioral economics (which came up in our discussion of how "loss aversion" can influence perception of value creation in the provision of basic services like water), this paper is an interesting read. Anytime you can include the phrase: "We ... introduc[e] fiat currency and trade to a colony of capuchin monkeys" you know you're having fun as an academic...

Prof. Bugg-Levine


"How Basic Are Behavioral Biases?: Evidence from Capuchin Monkey Trading Behavior"

Abstract: Behavioral economics has demonstrated systematic decision-making biases in both lab and field data. Do these biases extend across contexts, cultures, or even species? We investigate this question by introducing fiat currency and trade to a colony of capuchin monkeys and recovering their preferences over a range of goods and gambles. We show that capuchins react rationally to both price and wealth shocks but display several hallmark biases when faced with gambles, including reference dependence and loss aversion. Given our capuchins’ inexperience with money and trade, these results suggest that loss aversion extends beyond humans and may be innate rather than learned.

Here is the paper: http://www.som.yale.edu/faculty/keith.chen/papers/Final_JPE06.pdf