“So, a capuchin walks into a room. . . .” What sounds like the first line of a joke is actually the beginning of Keith Chen’s economics experiment. An assistant professor at Yale’s School of Management, Chen, ’98, is studying how monkeys handle money. First, the capuchins learned basic market concepts (usually by “purchasing” chunks of apples with coins) to grasp monetary value and fungibility. Chen (below) and his colleagues, including Laurie Santos, who runs Yale’s capuchin lab, then went the next step in trying to determine what aspects of human economic decisions are learned and what is deeply innate: the monkeys were introduced to risky choices.
One situation resulted in a “bonus” second apple chunk exactly half the time. In another scenario, two apple chunks were advertised with one disappearing half the time. The two situations are statistically identical. Your basic monkey theory would tell you “the capuchins shouldn’t care,” Chen says. But it turns out monkeys—like humans—highly prefer the “bonus” situation. In fact, capuchins show almost exactly the same level of loss aversion as people, making them, at least in one sense, “indistinguishable from the average stock market investor,” says Chen, and implying that this very common part of human behavior may be evolutionarily based.
Chen believes his findings could help in analyzing the future of individually managed retirement accounts and other aspects of public policy. In ongoing experiments, he is finding that the capuchins will likely never learn to save money. Simply put, they lack impulse control.
