Thursday, May 04, 2006

Is risk aversion an instinct? Monkeys may hold the answer

ScienceDaily: New Study Finds Similarities Between Monkey Business And Human Business:
"As part of the study, the researchers presented capuchin monkeys with two payoff-identical gambles: one in which a good outcome was framed as a bonus, and the other in which bad outcomes were emphasized as losses. Like humans, the monkeys displayed a strong preference for the first option, and like humans, the monkeys seemed to weigh the losses more heavily than comparable gains.
'Our results suggest that loss-averse behavior is a very general feature of economic choice,' explain the authors. 'Given our capuchins' inexperience with trade and gambles, these results suggest that loss-aversion extends beyond humans, and may be innate rather than learned.'"
The paper by Chen, Lakshminarayanan, and Santos is in the JPE. A working paper copy is available through SSRN.

Cite: Chen, Keith, Lakshminarayanan, Venkat and Santos, Laurie, "The Evolution of Our Preferences: Evidence from Capuchin Monkey Trading Behavior" (June 2005). Cowles Foundation Discussion Paper No. 1524 Available at SSRN:

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