Laurie Santos: How Monkeys Mirror Human Irrationality

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A monkey economy is as irrational as our human economy. Why do people make irrational decisions in such a predictable way? Laurie Santos looks for the roots of human irrationality by watching the way our primate relatives make decisions. This video documents a clever series of experiments in "monkeynomics" showing how some of the silly choices we make are made by monkeys, too.

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23 responses so far

  • Alexander Lobkovsky says:

    A real marketplace would have to have exchanges between equal members of the market place. When the monkeys start trading food for tokens amongst themselves, I would call it a marketplace. This does not invalidate the results of the experiments, just limits their applicability, IMHO.

    • db says:

      "exchanges between equal members of the market place. "

      if the members were equal why would anyone trade?

    • Terry Riegel says:

      Equal members? When your bank moves your savings account to another bank without your approval do you feel like an equal member? No, but you have the power to not do business with them again.

  • Chinna says:

    Amazing experiment: if monkeys can behave exactly like humans (evolution?) in a certain environment, then it makes it plausible, that certain environment must have made these monkeys evolve into humans: you acquire new capabilities and lose unnecessary things. It is like you start using calculators, you lose your ability to do math in your mind, even as it helps you do complicated math easily. It would be really cool, if they can actually extend this experiment and remove the human-market men and change the environment in a certain way and see if the monkeys start doing the whole selling and buying, by 1, coming up with their own version of currency 2, by dealing with products, assuming different monkeys have different abilities to gather different types of food/articles

  • Andrew says:

    I always laugh at the value judgments for these so called irrational decisions.

    The "loss aversion" etc. are NOT irrational mistakes in thinking. They are practical, real world short cuts for intelligent, rational thought process.

    The main thing the 'scientists' (and I use that term loosely) for these kinds of studies miss is "Trustworthyness".

    Here, let me explain. The basic assumption that gain and loss are identical, mathematically is true theoretically, but not practically. That is the risk of 50% $1 vs 50% no gain is NOT identical to a 50% $1 loss vs 50% no loss.

    Imagine instead of a clean, lab you are on a street corner. While there, you see a guy with 3 cards, asking you to find the queen. First time he offers you a free game - if you pick the queen, you get a $1, otherwise you get nothing.

    Obviously, it is worth playing.

    You play the game, and then he asks do you want to play for real money? Put up $1 of your own money and if you pick the queen, you get $2, otherwise you get nothing.

    See the problem? The term "loss aversion" is NOT an irrational decision based on faulty mathematics.

    It is a brilliant, evolutionary created, totally rational decision based on practical experience of how the world works. People cheat, people die, people misunderstand odds. In such a world, loss aversion makes a LOT of sense.

    • db says:

      the example she uses is 50% $2000 net gain vs 50% $1000 net gain, in both scenarios. your example uses 3 cards, from a guy on a street, so the distribution probably isn't even a normal random one.

    • Hall says:

      I don't see how these examples have much in common. The point here is that although the choice is the same: 50% chance of $1000/50% chance of $2000 or you can choose to be guaranteed $1500. When we start with $1000, we on average choose the safe route of taking the extra $500, leaving us at $1500. When we start with $2000, we on average choose the option that gives us a chance of not losing anything despite the fact that we risk losing $1000. Seeing that the odds are exactly the same in both cases, and the end result in $ is potentially the same, we still choose to gamble when it comes to losing money. In your example, we can choose to keep the money we have and be safe, while the other option is to both pay all we have got AND gamble. The risk is not equal to that which we saw in the video.

      The real life example would be a property that's rising in value, or falling. Respectively starting at $1000 and $2000. As it rises or falls to $1500, you have the choice of selling it or keeping it. You can take a chance allowing for it to possibly rise up to $2000 while also risking that it drops to $1000, it's 50/50. The other option is to sell at $1500, which is better than $1000, worse than $2000, but certainly risk free as you know what you'll get. Will you take the risk? It appears to depend on your starting point, and whether you are trying to gain money, or trying to avoid losing it.

      The real issue is that we choose whether we should gamble or not based on whether we are in a position where we will lose or gain money. Where we must lose money, we'd rather risk a big loss to avoid any loss at all than to take the safe road and end up with something in between. The exact opposite of our mentality towards gaining money, as it seems, where we do take the safe road rather than gambling. We always end up with money, whereas in your example we pay to try and win.

      This is very interesting, and I think it shows a great deal about how we deal with these issues. It is, however, not entirely conclusive for much besides our subconscious tendency to try and avoid all loss. We just have to flip it around when applying this to our normal money routines, and see it from both sides.

    • Matt says:

      I understand the point you're making, but that example is wrong. The first example has an expected outcome of earning 33 cents. The second game has an expected outcome of breaking even.

    • carlin says:

      First game odds are 33% gain vs %66 no change, and second game odds are 33% gain vs 66% loss. Note that the first game is gain v no gain and the second game is gain v loss, which isn't an example of what you were talking about. People frequently play round #2 despite the bad odds as well.

      To follow the presenter's formula. The street gamer gives you two options. Take 2$ of his dollars and try to find the queen amongst just two cards, if you lose he takes back 1$. Alternatively you can take just 1$ and try to find the queen to win another 1$. Both scenarios give you a 50% chance of winning 2$ and guarantee you 1$ if you lose. Most people will choose to play the $2 game because they perceive it as safer when in reality it is an identical game.

  • corey says:

    super cute face, dreadful hair.

  • Reow says:

    Wow... that was really embarrassing for her, it sounded like she'd never spoken in public before. I certainly wouldn't be encouraging people to watch that if I was her.

  • Webspin says:

    The problem with TED talks is they have far to many exited idealists and far to few logical scientists. This girl is a perfect case in point. On the monkey side I doubt the creatures considered the coins as true money or you'd see them collect and save them for upcoming needs. She many have blown it off with a joke about Americans not saving but this is only true in neighborhoods full of low IQ individuals and even then some save for the rainy day or better future.

    The human example of peoples shunning certainty of a small loss over potential no loss vs large loss is also incorrect based on real world statistics, namely insurance. Most people, if they have the means will purchase collision insurance accepting a guaranteed small reduction in net worth over not having any collision insurance and possibly no loss/greater loss of wealth. In fact as a group, all other things being equal, group net worth on average will always be higher if they never bought insurance as insurance companies have overheads of administration, fraud and waste not to mention profit.

    • sean says:

      If you believe people only in low IQ neighborhoods don't save money for the future, than you are not paying attention. Across the board no matter your IQ, race, gender,education, or attractiveness, people don't save enough in the US country. Now of course some do better than others, but truely with inflation the way it is, it becomes very much harder to predict for your future monetary needs as well.
      Some of my Physicist friends, (who are far smarter than I will ever hope to be, a couple with IQ's above 160,) don't have any real savings. They have good jobs, and yet still are unable to hold onto any of their money.

    • sean says:

      I do agree with you about TED talks by the way. My personal opionion is that they now are looking for speakers who are entertaining to people who don't have any scientific background, and you end up with more anecdotal speakers.
      Not always of course, but more and more frequently.

    • Jonni says:

      Of course the monkeys don't consider their currency in a way identical to dollars, because for all they know, money is tokens for buying grapes. Basically they have their little grape market there. I think there's little incentive to save money in this situation because grapes just aren't such a wonderful thing to refuse in order to buy in great amounts later in the case some other monkey doesn't steal the money first. You and me know that money can be used to buy houses, the monkeys are certainly unaware of that. It's a little different, but similar enough.

      What Laurie said is that the human example of people shunning certainty has been demonstrated with humans. That is, unless you provide good scientific references saying otherwise, I'd rather trust her. I understood it has also been demonstrated with some test much more like the monkey grape market than your insurance example.

      "This girl" is, by the way, associate professor and Ph.D in Harvard. How about you? And what exactly is her idealism?

    • JackAcid says:

      Actually your insurance example is backwards. Overall more people will lose money over time by purchasing insurance compared to not purchasing it. If you could save money on average by purchasing insurance then it would be impossible for insurance companies to ever make a profit. The average person *must* spend more than they receive or it simply doesn't work.

      In the context of what we're talking about here, namely loss aversion, insurance is actually the choice with a bigger loss potential for most people than failing to purchase insurance. Therefore, her claims are backed up by the decision to purchase insurance, since for most people that will be the greater loss choice over time.

      You are correct that not purchasing insurance will on average yield a greater net worth, but your example doesn't hold water because people choose a *greater* (not smaller) known loss rather than just a possible, usually less expensive (in the long run) option.

      If anything you might conclude that insurance companies prey on this very fact of repeated irrational human behavior in order to make a buck.

  • oliver stieber says:

    People cheat.
    Isn't that loss aversion?

    now do you understand?

  • sean says:

    Of course the more interesting question is really, is a primate really and truely evolved to be a participant in a market? Primates, including humans, tend to thing very short term, and the market created to be here very long term. Primates aren't equipped to deal with long term choices in general.

    It seems that the "loss aversion" being shown has some real purpose to our evolution, if it has existed for 35+ million years. So what is it that it does for primates in the wild? Or is the loss aversion just a side effect of some other complex brain functions?

    So while this experiment is great, I think it's time to move on, and start figuring out where this behavior comes into play for primates in the wild. If I were to warrant a n guess it would be that this is an actual behavior in the wild, which exhibits differently when the primate is exposed to logical (and physical,) forms of currency. So if the currency has a randomly associated value, as it might in the wild, then this behavior makes sense.

    I think if the monkeys had to work for their money, and then figure out how keep from going hungry by using the money, I believe the experimenters would learn more.

  • SpliFF says:

    Yeah but find me a tribe of monkeys who would voluntarily give 7 trillion bananas to the same tribe that stole the first 100 billion?. I say monkeys are actually SMARTER than humans.

  • The LlidD says:

    I find these results actually play a role in a majority of my decision making where gain and loss is concerned. Made me think about the term "power struggle". Bad decision making applies to heaps of daily scenarios.

    Things we gain and lose:
    Time
    Food
    Women/Men
    Land
    Control (groups)

    I was thinking about fencing, you gain and lose footing, you're also fighting for the win. It is very instinctive to "do your best" and protect ones best interest.

    To those analyzing this delightful presentation with percentage and math; fantasizing the monkeys to trade for food amongst themselves.

    The point was not accounting or arithmetical skills.

    The key discovery was a proof between our biological instinct proven with a human primate relationship. The parallels were our reactions to loss/gain when we already have then lose, compared with when we are earning.
    The key discovery which we ought to consider for our selves is where she had mentioned the evolutionary psychological precident for our decision making. Our human decisions are based on relative gain, or relative loss. We are also victims of lose aversion. To consider the absolute is difficult and is work. The simple is realativity - more and less.

    When I am making money - I see a future to my bank account. ( I love interest)
    When I pay money - We seek discount or avoid payment. (I hate Interest)

    Comments on this page provide an interesting example. Instead of analyzing the points, demonstrations, results then draw possible conclusions of the video article. Alot of people sought only the information from Laurie Santos presentation they recognized, then analyzed it for themselves - unrelated to the sociological and anthropological scope of the thesis.

    By looking at different choices at gain/loss scenarios for myself and others, then gauging natural reaction. Once you see your natural reaction then thinking of the best choice, identify the problem area. This practice could hopefully result in a method or aid to avoid bad decision making.

    all the best.

    I Hear; I Forget
    I See; I Remember
    I Do: I Understand

  • Greg says:

    The fact that humans and monkeys share this trait suggests that a) this mode of thinking is hardwired in the brain and b) that it is evolutionarily successful. From an evolutionary standpoint, the only time these decisions matter is when they effect your chances of making babies. As the Grants showed in their study of Galapagos finches, speciation happens during lean years. During times of plenty, everybody makes babies.

    Irrationality can be defined in two ways: thinking with the non-rational part of the brain, and incorrect/erroneous thinking. Clearly, this experiment assesses the first definition of irrationality: other primates share some of human's hard-coded thought processes regarding probabilities and utility. Whether this is a demonstration of erroneous thinking is another matter. Clearly, in this experiment the grapes were luxury items. The monkeys were not going to die if they did not get their grapes, and so their hard-coded decision-making inclinations were not optimized for the situation. And humans will not die if their 401k fails to retain its value, and so the hardcoded decision making processes should not be trusted in those contexts.

  • Tybo says:

    Interpretation seems to be an issue here.

    Consider a perspective of cheating. The consistent loss "cheats" 100% of the time, the other only 50% of the time. There is utility in not doing business with someone who cheats all the time, given the option of someone who cheats less often.

    Further, I'm not sure why absolute values are more rational than relative values. I see that they work out to equivalent in mathematical terms, but how is it irrational to give greater utility to what you already have rather than what you don't' have?