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Monkeys Exhibit the Same Economic Irrationality As Us

samzenpus posted more than 4 years ago | from the I-wanna-spend-like-you-oo-oo dept.

Education 254

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."

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Laurie Santos (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33206506)

That nasty old femdom lesbo hag. Go figure.

Re:Laurie Santos (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33206556)

This "article" was submitted by some fat zit-faced hentai-watching teenage dude while he was eating Bugles and playing CS Source. Calls himself "grrlscientist" for the attention. Another faux slashdot vagina. Go figure.

seems they've been watching government (2, Funny)

rcpitt (711863) | more than 4 years ago | (#33206516)

mistook the legislature for a barrel of monkeys

Irrational Market Behavior (5, Interesting)

catchblue22 (1004569) | more than 4 years ago | (#33206872)

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 [pbs.org] of the TV series Nova called "Mind over Money", which lays out many of my arguments clearly. The video only streams to the US.

Re:Irrational Market Behavior (0)

Anonymous Coward | more than 4 years ago | (#33207062)

Reagan didn't really use true economic study, or he would have altered his tax structure. Now we are left with the remains of the off-shore and reservoir system he put in place for the wealthy.

Re:Irrational Market Behavior (3, Interesting)

catchblue22 (1004569) | more than 4 years ago | (#33207306)

I would argue that the intellectual basis of neo-conservative economics comes mainly from the "Rational Market Hypothesis", and is thus largely based on the assumption of rationality. From the assumption of market rationality, there have been derived mathematical models that would make many mathematicians quiver. If you arranged a group of all the people in the world who actually understand these models, I suspect you could fit all of their names on a single sheet of paper (perhaps with a small font). The ideologues take the results or predictions of these models, as derived by Nobel Prize winning economists, and fit them into their ideologies. Then politicians like Reagan listen to their ideological advisors and implement their plans and models. I doubt Reagan himself had any formal understanding of economics beyond first year econ. courses.

Re:Irrational Market Behavior (1)

GigsVT (208848) | more than 4 years ago | (#33207378)

The intellectual basis of all economics rely on rationality of actors, Keynesianism included.

Stupid Keynesian tricks like increasing inflation above the savings rate of return rely on nominally rational actors to spend all their money and go into debt to avoid the penalty of saving money.

Unfortunately for the central planners, the American public has even more foresight than the Keynesians figure, and is willing to take the short term penalty of inflation demurrage in order to have enough savings to not get caught naked in the next Keynesian bubble collapse.

Re:Irrational Market Behavior (3, Interesting)

vtcodger (957785) | more than 4 years ago | (#33207478)

***The intellectual basis of all economics rely on rationality of actors, Keynesianism included.***

In no way shape or form. You need to read up on Keynesianism and to do a little work on the difference between rationality and predictability. It seems to be possible to predict behavior (especially, but not limited to, foolish behavior) without understanding it and certainly without thinking it is rational.

Re:Irrational Market Behavior (4, Insightful)

jbeach (852844) | more than 4 years ago | (#33207486)

Disagree that Keynesian economics relies completely on "rationality", at least as defined as "free individual rational choice". Keynesian policies such as FDR used to help the US out of the great depression involved a massive increase of government spending to give money and jobs to the poor and middle class, regardless of deficits - and NOT leaving things to the "invisible hand of the free market". Which you can guess how I feel about by my sig.

And the current bubble collapse we're still suffering from, the housing market, is more adequately described as a Milton- Friedman-esque bubble. As it certainly was not produced by the Bush administration following Keynesian policies.

Re:Irrational Market Behavior (4, Insightful)

L0rdJedi (65690) | more than 4 years ago | (#33207614)

Disagree that Keynesian economics relies completely on "rationality", at least as defined as "free individual rational choice". Keynesian policies such as FDR used to help the US out of the great depression

FDRs policies did not get us out of the Great Depression (which was only called that in the US). What got us out of the Great Depression was getting into a war. Pulling millions of men out of the labor market had the obvious effect of lowering unemployment.

Nobody ever got rich by spending more money than they have. If an individual can't get out of debt that way, it is irrational to believe that a nation can. In fact, no nation has ever done it and ever single nation that tries it ends up in revolution or has their money inflated out of existence.

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.

Re:Irrational Market Behavior (5, Informative)

toadlife (301863) | more than 4 years ago | (#33207970)

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 [wikipedia.org] 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.

Re:Irrational Market Behavior (2, Informative)

drsmithy (35869) | more than 4 years ago | (#33208206)

Nobody ever got rich by spending more money than they have.

Lots of bankers would disagree.

Re:Irrational Market Behavior (1)

Xonstantine (947614) | more than 4 years ago | (#33207446)

I would argue that the intellectual basis of neo-conservative economics comes mainly from the "Rational Market Hypothesis", and is thus largely based on the assumption of rationality.

Pretty much all non-marxist economics, not just "neo-conservative economics" (whatever that is...which school exactly does that fall into, the Austria, Chicago, Keynesian?), follow the rational market hypothesis. Central control advocates (and marxists are among them) argue that they can "one-up" the market by having so-called experts dictate how much of what gets produced where and what the prices should be. They tend to have equally incomprehensible (and even more unworkable) models than the free-market economists do, and tend to get sidetracked by social justice issues along the way.

Re:Irrational Market Behavior (1, Interesting)

Anonymous Coward | more than 4 years ago | (#33207148)

Keynes was also guilty of attempting to quantify economics; he just used different numbers to reach different conclusions.

If you don't want to fall into that trap, you're left with von Mises. But I doubt you'd agree with him. You've made your decision.

Re:Irrational Market Behavior (1, Insightful)

hsthompson69 (1674722) | more than 4 years ago | (#33207176)

In other words, the above research points towards falsifying the primary economic ideology that has been used to govern America since Reagan

I'm not sure if that's quite the case - the economic ideology of the free market and the economic ideology of centralized control are *both* confounded by irrational humans.

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.

Any casual search of google will reveal refutations of Keynsian economics, I'll leave that as an exercise for the reader. On the other hand, I might suggest Bastiat's "The Law" (http://www.fee.org/pdf/books/The_Law.pdf) as a refutation of the idea of a flawless government (emphasis my own):

"The Superman Idea
The claims of these organizers of humanity raise another question which I have often asked them and which, so far as I know, they have never answered: If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, 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? The organizers maintain that society, when left undirected, rushes headlong to its inevitable destruction because the instincts of the people are so perverse. The legislators claim to stop this suicidal course and to give it a saner direction. Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority."

Re:Irrational Market Behavior (1, Funny)

GigsVT (208848) | more than 4 years ago | (#33207276)

Of course Krugman knows better than you how to spend your own money.

How dare you question the wisdom of Keynesians.

Re:Irrational Market Behavior (1)

Xonstantine (947614) | more than 4 years ago | (#33207502)

I'm not sure if that's quite the case - the economic ideology of the free market and the economic ideology of centralized control are *both* confounded by irrational humans.

Exactly so. Irrationality can be a valuable competitive trait in a stratified social climbing framework where for one primate to succeed, another has to fail. There is a constant arms race over information and intellect between individuals, generations, and groups. If a person or group behaves in a perfectly rational way (re: perfectly predictable), then it becomes easy to counter that person or group, especially if you are smarter, have better information, or greater resources to bring to bear. Irrationality is a strategy of nullifying these advantages because it means that no matter how you think I might react, and whatever surprises you have lie in store for me, I might confound your predictions and react in a completely irrational and therefore unplanned-for-by-you fashion. As a contrived example, it's how otherwise incompetent leaders can sometimes stay in power, by arbitrarily executing or rewarding people for spurious reasons, raising one group up with favors, and bringing another group down when they become too successful, but with no discernible pattern to either.

Re:Irrational Market Behavior (1)

drewhk (1744562) | more than 4 years ago | (#33207758)

Have you played table games with girls (Settlers of Catan or something like that)? They are extremely vengeanceful! Even if it is not rational. And at the end, you have to retreat with your "cold and logical" strategy as they punish you to nonexistence. Rationality/Irrationality is a slippery definition.

Re:Irrational Market Behavior (2, Informative)

camperdave (969942) | more than 4 years ago | (#33207512)

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.

Re:Irrational Market Behavior (2, Informative)

dkleinsc (563838) | more than 4 years ago | (#33207602)

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 [wikimedia.org]
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.

Re:Irrational Market Behavior (2, Informative)

dollarwizard (1806856) | more than 4 years ago | (#33207210)

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 [wikipedia.org] before posting about it, although since you got a rating of "5" maybe only cursory knowledge is required?

Re:Irrational Market Behavior (-1, Flamebait)

GNT (319794) | more than 4 years ago | (#33207220)

What a load of crap.

Read some Austrian economics.

Re:Irrational Market Behavior (1)

jellomizer (103300) | more than 4 years ago | (#33207226)

However I have seen stats that shown no matter who's policy it doesn't really effect which side is better for the Economy then the other. Because both sides are just as irrational you have to choose between giving everyone higher taxes or having businesses take that money from your pocket.

Pay the Feds or Pay the companies... You end up loosing more money then you should.

Re:Irrational Market Behavior (4, Interesting)

GigsVT (208848) | more than 4 years ago | (#33207266)

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.

No, it doesn't. It starts with a basic assumption that we make irrational economic decisions. You are begging the question.

"Rationality" is based on personal, usually unknowable, factors. It's impossible to prove or disprove the rationality of an economic decision since there's no way that you can take psychological factors, wants and needs into account, some of which may not even be fully known to the subject.

Re:Irrational Market Behavior (0)

Anonymous Coward | more than 4 years ago | (#33207450)

WARNING: You have used the phrase "begging the question" correctly. YOU DO NOT BELONG HERE.

Re:Irrational Market Behavior (1, Funny)

Anonymous Coward | more than 4 years ago | (#33207530)

WARNING: You have mistranslated the Latin phrase petitio principii. It has nothing to do with begging or questions.

Re:Irrational Market Behavior (0)

Anonymous Coward | more than 4 years ago | (#33207986)

Sola lingua bona est lingua mortua.

Re:Irrational Market Behavior (4, Interesting)

catchblue22 (1004569) | more than 4 years ago | (#33207718)

Economists like Milton Friedman and his ilk would put it that in a perfect free market economy there is no such thing as a stock market bubble. There is no such thing as a housing bubble. They would say that any bubble like behavior is due to "distortions" in the market place that cause their perfect system to malfunction. They base these assertions on their assumption that the market always places the best price on a good or service based on all available information. Thus a bubble is impossible. They assume that people buy houses to satisfy their own need for accommodation and to maximize their future net worth. What they miss is that, in seeking to maximize their net worth, individual market actors, and the market itself will buy houses because the prices are going up. They will be afraid that they will be priced out of the market. They will be exuberant because they seem to be making lots of money on rising real estate prices, and they will borrow obscene amounts of money to jump into the rising market, forcing prices up even further. The prices will keep rising for a while, reinforcing the irrational belief that the inflated market is based on real supply and demand factors. Eventually, the prices crash. Since people were buying because the prices were rising, when the prices stop rising, demand dries up, causing the prices to crash.

The situation above has played out in the American real estate market. And it has played out in the stock market many times. Such behavior is inherently irrational. If the market itself, and not just the individual actors displays irrational behavior, then I would argue that the "Efficient Market Hypothesis" is falsified.

Rationality" is based on personal, usually unknowable, factors. It's impossible to prove or disprove the rationality of an economic decision since there's no way that you can take psychological factors, wants and needs into account, some of which may not even be fully known to the subject.

No. We are talking about the rationality of the market itself, and not necessarily about just the individual actors. The assumption is that the market will always set the best price based on supply and demand. The assumption is that the market price is always the most rational price based on all available information. Bubbles are irrational phenomenon. The price is going up because the price is going up. If we have built into our brains inherent irrationality, and if all actors in the market display this to some degree or another, then the market is going to act irrationally, since market behavior is just the overall behavior of all individuals.

Re:Irrational Market Behavior (1)

boom1shot (1663101) | more than 4 years ago | (#33207990)

Firstly, I am no economist nor statistician. But, isn't there a fundamental difference between the logical statistics of a modeled economy (regardless of how accurately modeled it may be - which is the point I think you're really trying to drive home -- a fundamental flaw in this model) and the statistics of any individual factor or sector of the overall algorithm used?

What I'm saying is this: You cannot claim that because some unbeknown factor will cause irrationality within the market, that the market is now irrational. Rationale in marketing is implicitly based on the irrationality of our purchases - there are huge, successful companies that, when taken a step back and looked at with a grain of salt, do not represent any real form of reasoning. Marketing, in and of itself, as a huge factor in economics and "the market," is inherently irrational and meant to appeal to the senses.

No. We are talking about the rationality of the market itself, and not necessarily about just the individual actors.

This is where your argument falls apart. You are begging the question.

Re:Irrational Market Behavior (2, Interesting)

VortexCortex (1117377) | more than 4 years ago | (#33208082)

The market itself is the fallacy.

Company X earns Y amount of profit annually.
Company X's stock market price increases or decreases due to market perceptions.
Company X still earns Y amount of profit annually, but its its stock price reflects a different value.

Yahoo's stock price raised when Microsoft wanted to purchase them, and tanked after Yahoo's refusal to sell;
This affected stock price of Yahoo even though they still earned the same profit annually...

Re:Irrational Market Behavior (1)

jabithew (1340853) | more than 4 years ago | (#33208200)

The real estate market is a very bad example, as it is easily one of the most distorted markets available. Consider that in the first quarter of 2010, Fannie Mae / Freddie Mac guaranteed 96.5% of new mortgages*, which is an indicator of state support of home ownership. Politically it's been a goal to extend home ownership, potentially beyond what is economically feasible.

In London, my home town, we have other problems, with restrictions on space, planning slowness, nimbyism from house owners, the large swathes of the city which are listed in some form or other, and the green belt effectively preventing any kind of free market. New entrants cannot easily enter the market for a variety of reasons, mostly artificial.

I'm not necessarily disagreeing with you, but if you look at the trading in futures or derivatives, they're much closer to a perfect market. And they still screw up because of "irrational exuberance".

*http://www.economist.com/node/16640249?story_id=16640249

Re:Irrational Market Behavior (0)

MindSlap (640263) | more than 4 years ago | (#33207268)

You make TWO valid points..or rather descriptions.

And I can personally identify both.
Rational economics: Me
I do my homework, research etc before committing to a purchase. This includes actual 'need' of said item and how it compares to other offerings, cost/benefits et al.

Irrational economics: My g'friend.
Oh! Thats cute! SOLD!

So..while your post are valid, there exists 'both'.
Both the rational..and the not-so-rational.

Re:Irrational Market Behavior (1)

erroneus (253617) | more than 4 years ago | (#33207332)

EMH reflects the notion that all information is available? I always thought that was known as "insider trading" and punishable by law.

Re:Irrational Market Behavior (1)

L0rdJedi (65690) | more than 4 years ago | (#33207550)

In other words, the above research points towards falsifying the primary economic ideology that has been used to govern America since 1787.

There, fixed that for you. And in all seriousness, Reagan's ideas weren't new. JFK did the same thing (actually, he was able to cut both taxes and spending) and so did the President back in 1920 (which staved off an ecomonic depression as well). The idea of low taxes, low spending, and few, if any, Federal regulations was a primary purpose in 1787. This is exactly why Federal powers were enumerated but State powers were not. The Founders wanted the Feds to be limited to a small set of named powers and nothing else. The States would have much more power and then if a State did something you didn't like, you could pick up a move to a State you did like.

What the above research shows is that monkeys are stupid. People do sometimes do stupid things too. The reality is that in a free society, people (and businesses) have to be allowed to fail. If they don't, they never learn what they did wrong.

Having a strong central government that "guides" the marketplace has never worked and always leads to high unemployment and little to no growth. Putting high taxes on businesses does the exact opposite of what you might expect. FDR did it during the late 30's (remember the Great Depression?) and it caused unemployment to go even higher. In fact, his own treasury secretary even said that they'd spent money for years and the unemployment rate hadn't changed. The only thing they had to show for all the spending was a mountain of debt.

You need to cut spending, cut taxes, and reduce regulation. Only then will businesses hire more people and then the economy will grow.

Re:Irrational Market Behavior (1)

toadlife (301863) | more than 4 years ago | (#33208038)

FDR did it during the late 30's (remember the Great Depression?) and it caused unemployment to go even higher.

Actually the recession of 1937 happened after FDR *cut* government spending.

Thanks for playing though!

Meh. (-1, Troll)

Shadow Wrought (586631) | more than 4 years ago | (#33206518)

So they buy Apples too, huh?

Re:Meh. (4, Funny)

ultrabot (200914) | more than 4 years ago | (#33206562)

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.

Re:Meh. (0)

Anonymous Coward | more than 4 years ago | (#33206632)

What a coincidence, just the other day I saw a monkey throwing and eating it's own feces.

Re:Meh. (0)

Anonymous Coward | more than 4 years ago | (#33207796)

What a coincidence, just the other day I saw a porn star throwing and eating her own feces.

Re:Meh. (0)

Anonymous Coward | more than 4 years ago | (#33206804)

yeah, but they don't suck cock like you do.

It's called a Bonzi Scheme (4, Funny)

Drakkenmensch (1255800) | more than 4 years ago | (#33206546)

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...

Re:It's called a Bonzi Scheme (1)

Zerth (26112) | more than 4 years ago | (#33206854)

No wonder they'll pay us to punch the monkey, he sold them a lower branch of a fruit default swap.

Re:It's called a Bonzi Scheme (1)

countertrolling (1585477) | more than 4 years ago | (#33206976)

Better yet, a "Bonzo [tqn.com] " scheme. We've been living through it since the 80s

Re:It's called a Bonzi Scheme (0)

Anonymous Coward | more than 4 years ago | (#33207188)

Hmm all these connections, Regan and Bonzo, Banzai Buddy, Ponzi Schemes...

*DOUBLE RAINBOW VOICE* What does it mean?!

Same ol' Same ol' (1)

Tablizer (95088) | more than 4 years ago | (#33206566)

Now they need a stimulus plan to bail out their Banana Bubble, but the Gorillas are opposing it.

Re:Same ol' Same ol' (1, Funny)

twoallbeefpatties (615632) | more than 4 years ago | (#33207098)

Now they need a stimulus plan to bail out their Banana Bubble, but the Gorillas are opposing it.

And why should the gorillas have to climb a tree to give a monkey a banana? The monkeys should stop being so lazy and get off of banana welfare! See, this is what happens in social banana republics - all of the good bananas get offshored! If these monkeys really wanted a banana that badly, they'd move to Zimbabwe to be where the bananas are! But noooooo, they just expect the zookeepers to keep bringing them bananas, when everyone knows that zookeepers only increase the amount of time it takes for monkeys to go find their own bananas! Don't hate a gorilla just because you don't have as many bananas as he does!

Watch out: No summary (1)

140Mandak262Jamuna (970587) | more than 4 years ago | (#33206616)

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.

So niggers are bad with money too? (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33206646)

har har har!

grammar nitpick (1)

The Clockwork Troll (655321) | more than 4 years ago | (#33206696)

Monkeys exhibit the same economic irrationality as we [do].

Re:grammar nitpick (1)

ArsonSmith (13997) | more than 4 years ago | (#33206780)

Or,

Monkeys exhibit the same economic irrationality as the US.

Same as the US? (1)

davidwr (791652) | more than 4 years ago | (#33206878)

They used a fiat currency as well?

Re:grammar nitpick (1)

Ragzouken (943900) | more than 4 years ago | (#33206888)

Signficance nitpick: it doesn't matter.

Not surprising (1)

gmuslera (3436) | more than 4 years ago | (#33206714)

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.

Rational for the species or the individual? (3, Interesting)

spun (1352) | more than 4 years ago | (#33206926)

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.

Re:Rational for the species or the individual? (1)

Jah-Wren Ryel (80510) | more than 4 years ago | (#33207328)

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.

FWIW, that's also George Washington's argument for organized religion: "Whatever may be conceded to the influence of refined education on minds of peculiar structure, reason and experience both forbid us to expect, that national morality can prevail in exclusion of religious principle."

Re:Rational for the species or the individual? (0)

Anonymous Coward | more than 4 years ago | (#33207748)

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.

The conclusion from that experiment is pretty flawed. I propose a similar experiment. You give someone $10 You tell them if they want, they can buy a lottery ticket with the money that has a 1 in a million chance of winning a million dollars. A rational person would keep the money. But, a lot of people would instead buy the lottery ticket. I would conclude that Person A in the above experiment just likes gambling. Apparently, a lot of people like gambling, though I am not sure it is good for the species... Person B may be motivated by the (mistaken?) belief that there may end up being more than one round of this in the experiment. If there were a second round, he would profit more by giving some money back to person A in order to keep getting money from person A.

Re:Rational for the species or the individual? (1)

spun (1352) | more than 4 years ago | (#33207864)

No, person A does not just like gambling. There are plenty of other variations on this game that prove that. Some do use multiple rounds, but that is clearly explained to the participants. Look up game theory if you want to know more, you don't have to just speculate without any information.

Re:Rational for the species or the individual? (0)

Anonymous Coward | more than 4 years ago | (#33207788)

You should read some more Steven Levitt. The experiment you are referring to have been refined to be more like real life and the behaviour of the subjects was changed accordingly. That experiment mostly shows that many people put a value on not being seen as assholes.

Re:Rational for the species or the individual? (1)

spun (1352) | more than 4 years ago | (#33207902)

That is only one game theory experiment. In some games, players are completely anonymous and yet people still tend to behave fairly. In other games that are more like real life, like the Public Goods game, people actually incur harm to themselves in order to punish unfairness in others. The more like real life you make these games, the more fairly people behave.

mod 0P (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33206732)

here, but wha7 is OpenBSD. How many as the premiere give other people

Evidence that monkeys are smarter (1)

bobdotorg (598873) | more than 4 years ago | (#33206736)

You ever see a monkey with a Zune?

Re:Evidence that monkeys are smarter (0)

Anonymous Coward | more than 4 years ago | (#33206776)

You also never see a monkey with an iPhone 4. Co-incidence?

Re:Evidence that monkeys are smarter (0)

Anonymous Coward | more than 4 years ago | (#33206836)

You also never see a monkey with air conditioning.

Re:Evidence that monkeys are smarter (3, Funny)

RichMan (8097) | more than 4 years ago | (#33206956)

You ever see a human with a Zune?

Re:Evidence that monkeys are smarter (2, Funny)

oldmac31310 (1845668) | more than 4 years ago | (#33207772)

I did once. She was an animal.

I learned it from you... (0, Redundant)

space_jake (687452) | more than 4 years ago | (#33206824)

Monkey see monkey do!

Hilarious (0)

Anonymous Coward | more than 4 years ago | (#33206828)

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!

One big difference (4, Insightful)

DriedClexler (814907) | more than 4 years ago | (#33206870)

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...

Re:One big difference (0)

Anonymous Coward | more than 4 years ago | (#33206940)

Maybe interesting, but you're 70 years late with that one.

Also, grapes are yummier than gold.

Re:One big difference (2, Insightful)

ElectricTurtle (1171201) | more than 4 years ago | (#33207076)

Your example is not parallel, as you assume that the transition from tokens for grapes to tokens for nothing is the equivalent of silver certificates for whatever you want to purchase transitioning to fiat currency for whatever you want to purchase. Let me see if you pick up the key element there...

...

That's right, people still get whatever they want to purchase. That they cannot trade a certificate for a set amount of precious metals is immaterial to most people, as precious metals themselves are of little direct utility outside of certain industries and therefore are as representational as the fiat currency itself.

This is not to say that I don't wholly support trying to accumulate concentrations of materials that have a real value irrespective of government policy (per se).

Re:One big difference (1)

Maxo-Texas (864189) | more than 4 years ago | (#33207114)

Humans can't eat gold.

When humans find they can't trade the paper for food, they tend to go apeshit.

Re:One big difference (1)

spitzak (4019) | more than 4 years ago | (#33207524)

That is just stupid. I can assure you that the monkeys will not care one bit if the researchers stopped giving them a piece of gold for the coin, as long as they could still get grapes.

Re:One big difference (1)

Rod Beauvex (832040) | more than 4 years ago | (#33207612)

Um. No. Humans go apeshit if things don't go exactly their way. Period. Even if--no, especially if they made the situation or routine up in their minds, and ignored contradictory evidence otherwise.

Thinking ahead (-1, Troll)

inthealpine (1337881) | more than 4 years ago | (#33206936)

I think those in the US think though finances about 10 seconds into the future.
Other places in the World if you fail to plan or be responsible you feel the pain. In the US there are so many social programs it keeps the least responsible people from feeling any pain.
If social programs arn't enough the court system exists to let the scum of the country sue everyone around them that actually do any work.

If you ask me, the monkeys have one up on us humans.

Re:Thinking ahead (1)

sznupi (719324) | more than 4 years ago | (#33207282)

The s-word seems ever more scary lately?

I started watching, then stopped... (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33206958)

First of all, she keeps saying the same things over and over. 4 minutes in and no examples of our bad decision making.

Finally to add insult to injury, I read this:

"world's leading thinkers and doers give the talk of their lives in 18 minutes. Featured speakers have included Al Gore on climate change"

And then I realized I made *that* mistake previous and unlike the apes, I have the capacity to turn TED off. Thanks but no thanks.

Synopsis (1)

BobMcD (601576) | more than 4 years ago | (#33207040)

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.

Re:Synopsis (1)

sznupi (719324) | more than 4 years ago | (#33207432)

Generally, given the amount of similarities (what is good in us, and also what is bad in us), it almost seems like finding some real differences is sort of more noteworthy.

Of course that would go against our usual notion of "us / them" and seeing primarily differences... (hell, we're absolutely, pardon the pun, apeshit about such trivial stuff as ethnicities; many here are even from places where just one distant ancestor can firmly place you in just his group...nvm that by such criteria we're all 100% of that group, all coming out of one continent relatively recently)

I'm going to save this come back . . . (1)

grapes911 (646574) | more than 4 years ago | (#33207072)

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."

As the only /.er who actually watched the video... (5, Informative)

dollarwizard (1806856) | more than 4 years ago | (#33207106)

...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!

Re:As the only /.er who actually watched the video (1)

noidentity (188756) | more than 4 years ago | (#33207946)

Monkeys are terrible savers, as are humans.

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?

Re:As the only /.er who actually watched the video (1)

gurps_npc (621217) | more than 4 years ago | (#33208122)

You have accurately described what the the claims are. Note, the judgement values are in fact fairly arbitrary.

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.

Old News (2, Informative)

Anonymous Coward | more than 4 years ago | (#33207160)

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

Re:Old News (0)

Anonymous Coward | more than 4 years ago | (#33208168)

I thought this all sounded familiar. It also appeared in the Epilogue of "Superfreakonomics".

Funny thing though, I didn't watch the whole video, so I don't know if it came up or not, but the same study also observed prostitution in the monkey population. No, I am not kidding.

Researcher has a bias for 'smart' vs. 'stupid' (1, Interesting)

ElectricTurtle (1171201) | more than 4 years ago | (#33207238)

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.

Re:Researcher has a bias for 'smart' vs. 'stupid' (1)

spitzak (4019) | more than 4 years ago | (#33207598)

Boy you did not understand a word of that presentation, did you? Or your statement about risk indicates that exactly the mistake she is talking about is infecting your brain at so high a level that you can actually write paragraphs defending your irrationality.

She made no opinion over whether risk for a higher reward is better or worse. If you had paid the slightest bit of attention you would have seen that she presented two IDENTICAL scenarios (ie the choce between 2 grapes and a 50/50 chance of 1 or 3 grapes) and the monkeys and humans both made a DIFFERENT choice because of the completely irrelevant difference of what was in the researcher's hands before the choice was made. If the researchers were both holding 1 grape initially, the monkeys (and humans) were risk-averse. If the researches were holding 3 grapes initially, then the monkeys and humans preferred the risk. This is monumentally irrational but it is certainly deeply imbedded in your and my brain.

Re:Researcher has a bias for 'smart' vs. 'stupid' (1)

cephus (1471105) | more than 4 years ago | (#33207818)

I think you have failed to notice that there is no rational basis for making the choice. The two choices are equally good (or bad). So in the absense of a rational basis for choosing, why is it surprising that the choice isn't rational? And why is making different choices in the two scenarios more irrational than always choosing the sure thing or always taking the risk?

Re:Researcher has a bias for 'smart' vs. 'stupid' (0)

Anonymous Coward | more than 4 years ago | (#33208134)

Sure there is a rational basis. If you want to maximize total payout while minimizing risk, you take the guaranteed payout/loss. Sure, the expected value of total payout is the same, but the variance is different. So in this situation (equal expected total payout) and under this max/min framework, it is a simple choice to go with the reward with a variance of 0.

Re:Researcher has a bias for 'smart' vs. 'stupid' (1)

TexVex (669445) | more than 4 years ago | (#33207924)

She made no opinion over whether risk for a higher reward is better or worse.

QFT.

"A bird in hand is worth two in the bush." When we have a thing of value, we are not inclined to risk it.

On the other hand, "in for a penny, in for a pound." When we perceive we are losing something of value, we are much more inclined to take risk to keep it. An investor may choose to hold on too long to taking stock on the hope that its value will return.

When playing poker, amateur players will often chase large pots with losing hands. The more money they put in the pot, the more they want to get that money back, so the tougher the decision is to let the hand go. Professional poker players, however, make it a point to realize that money they already placed in the pot is no longer theirs, and look at each subsequent play from the standpoint of gaining from risk versus reward.

Re:Researcher has a bias for 'smart' vs. 'stupid' (0)

Anonymous Coward | more than 4 years ago | (#33207696)

You misunderstand. The point is that people (and monkeys) choose risk when the problem is framed one way and safety when it is framed another. Both scenarios are identical, but how they are framed dictates how people behave.

If you missed it, the general idea is this:

You are given $1000. However, you now have to make a choice. You can take the risky choice, wherein you have a 50/50 chance of getting another $1000 (but also a 50/50 chance of getting an extra $0). Or, you can take the safe choice with a guaranteed $500.

The risky choice gives you a 50/50 chance of $1000/$2000. The safe choice nets you $1500.

Now, scenario number two. You are given $2000. Again, you have two choices. Risk means you lose either $1000 or $0, safety means you lose $500.

The risky choice gives you a 50/50 chance of $1000/$2000. The safe choice nets you $1500 (sound familiar?)

People choose the safe option in the first scenario, but the risky option in the second. But the scenarios are identical; one's just framed as a gain and the other as a loss. This is why we're called irrational.

In fact, she appears to have presented the problem in such a way as to avoid the issue of which is better between gain and loss. Over time, the risky behavior will average out to $1500. So will the safe behavior. So in the long run (if you get to play the game over and over), it doesn't matter what you choose.

Re:Researcher has a bias for 'smart' vs. 'stupid' (0)

Anonymous Coward | more than 4 years ago | (#33207952)

In all her experiments the two outcomes have the same expectation value. Statistically, neither the risky nor the safe transaction is any worse than the other because the reward on average is the same. Is it really useful to call either choice better?

It would be more interesting to repeat the experiment several times with one choice having a lower expectation value than the other. Will the monkeys prefer the lower expectation value in some cases?

Confirmation Bias? (2, Interesting)

cephus (1471105) | more than 4 years ago | (#33207370)

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.

Re:Confirmation Bias? (1)

spitzak (4019) | more than 4 years ago | (#33207634)

Like the previous poster, you completely ignored the fact that the monkeys (and humans) made the complete OPPOSITE choice based on an actually irrelevant difference: whether the guys were holding 1 or 3 grapes initially. The results and cheating are EXACTLY the same, yet they made the OPPOSITE choice based on what is actually something that has nothing to do with the outcome!

Re:Confirmation Bias? (1)

cephus (1471105) | more than 4 years ago | (#33207712)

No, I made up some trivial examples to illustrate a point about viewing results only within the context of a previously posed question. Just because the researcher was interested in a specific behavior that doesn't mean the test subjects weren't basing their responses on some other criteria.

Depression? (1)

uncholowapo (1666661) | more than 4 years ago | (#33207484)

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.

For a second I thought... (1)

SoundGuyNoise (864550) | more than 4 years ago | (#33207498)

Is that a female Weird Al in the embedded clip in the article?

Why? Do they get Best Buy extended warranties too? (2, Funny)

bADlOGIN (133391) | more than 4 years ago | (#33207532)

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.

Our Primates? (1)

oldmac31310 (1845668) | more than 4 years ago | (#33207810)

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.

I always laugh at these insults (2, Interesting)

gurps_npc (621217) | more than 4 years ago | (#33208018)

They take a brilliant, evolved decision making process and call it "irrational".

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.

Monkeys Pay for Sex (1)

handy_vandal (606174) | more than 4 years ago | (#33208204)

Monkeys Pay for Sex [google.com]

It goes without saying that we're talking about male monkeys.

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