The Evolution of Our Preferences: Evidence from Capuchin-Monkey Trading Behavior

Keith Chen, Venkat Lakshminarayanan and Laurie Santos

No 1524, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Behavioral economics has demonstrated systematic decision-making biases in both lab and field data. But are these biases learned or innate? We investigate this question using experiments on a novel set of subjects — capuchin monkeys. By introducing a fiat currency and trade to a capuchin colony, we are able to recover their preferences over a wide range of goods and risky choices. We show that standard price theory does a remarkably good job of describing capuchin purchasing behavior; capuchin monkeys react rationally to both price and wealth shocks. However, when capuchins are faced with more complex choices including risky gambles, they display many of the hallmark biases of human behavior, including reference-dependent choices and loss-aversion. Given that capuchins demonstrate little to no social learning and lack experience with abstract gambles, these results suggest that certain biases such as loss-aversion are an innate function of how our brains code experiences, rather than learned behavior or the result of misapplied heuristics.

Keywords: Prospect theory; Loss aversion; Reference dependence; Evolution; Neuroeconomics; Capuchin monkeys; Monkey business (search for similar items in EconPapers)
JEL-codes: C91 C99 D12 D46 D80 D81 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2005-06
New Economics Papers: this item is included in nep-evo, nep-exp, nep-hpe and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published in Journal of Political Economy (2006), 114(3): 517-537

Downloads: (external link)
https://cowles.yale.edu/sites/default/files/files/pub/d15/d1524.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:1524

Ordering information: This working paper can be ordered from
Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
The price is None.

Access Statistics for this paper

More papers in Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University Yale University, Box 208281, New Haven, CT 06520-8281 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Brittany Ladd (cowles@yale.edu).