There is no lesson or moral to this post, only the means to expose how our lizard brains work.
A study by Associate Professor of Economics, Keith Chen, showed that monkeys understand the basics on how money works and can act in irrational ways, just like humans do. I will summarize what I have learned about this unusual, but insightful, experiment:
Capuchin monkeys were presented with two games consisting of grapes and a coin toss:
- 1st game: A researcher showed the monkey one grape and flipped a coin. If the coin landed on the correct side, the researcher would give the monkey the first grape as well as a bonus grape. If the coin landed on the incorrect side, the monkey would get the original, single grape.
- 2nd game: A researcher showed the monkey two grapes. If the coin landed on the correct side, the monkey got both grapes. If the flipped coin landed on the wrong side, one of the two grapes would be taken away.
Here is the kicker: Once the monkey learned the game, they strongly preferred the 1st game – the researcher that started with one grape! That isn’t rational. It doesn’t matter which game they played, the chances of walking away with one or two grapes were identical, a 50/50 chance. So why the strong preference to play the 1st game?
The difference is called “Loss Aversion”, making an irrational determination between two equal outcomes in order to avoid the feeling that you are losing something. And it didn’t take a lab full of monkeys to prove that, studies on human beings have identical results. If you were to play the same game but with $100 bills instead of grapes, you think you would go to the guy that started by showing you $200, but in real life you probably would go *the guy with only $100 with the opportunity to win. BTW: Did you notice I wrote “the guy with ONLY $100″? Even as I typed this article, I exposed my feelings on winning versus losing. Ugh!
As my digital friend Dave “Sparky” Saganaki says: “We are all just a bunch of shaved monkeys with car keys”. Ouch.