Friday, June 10, 2005

Monkey money

Steve Levitt (my former colleague in the Society of Fellows at Harvard, now a famous economist and author of the bestseller Freakonomics) writes on Yale professor Keith Chen's research on monkey economics (Times magazine). Apparently capuchins can be taught to use metal slugs as a unit of exchange. Chen has already observed theft, prostitution and loss aversion among the little fellows. Perhaps Chen can stimulate an investment bubble in grapes by lowering interest rates? :-)

See here for video and pictures of Chen, his Yale capuchins (they understand money), and Harvard tamarins (they play prisoner's dilemma).

"It is sometimes unclear, even to Chen himself, exactly what he is working on. When he and Santos, his psychologist collaborator, began to teach the Yale capuchins to use money, he had no pressing research theme. The essential idea was to give a monkey a dollar and see what it did with it. The currency Chen settled on was a silver disc, one inch in diameter, with a hole in the middle -- ''kind of like Chinese money,'' he says. It took several months of rudimentary repetition to teach the monkeys that these tokens were valuable as a means of exchange for a treat and would be similarly valuable the next day. Having gained that understanding, a capuchin would then be presented with 12 tokens on a tray and have to decide how many to surrender for, say, Jell-O cubes versus grapes. This first step allowed each capuchin to reveal its preferences and to grasp the concept of budgeting.

...But these facts remain: When taught to use money, a group of capuchin monkeys responded quite rationally to simple incentives; responded irrationally to risky gambles; failed to save; stole when they could; used money for food and, on occasion, sex. In other words, they behaved a good bit like the creature that most of Chen's more traditional colleagues study: Homo sapiens."

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