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How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior

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  • M. Keith Chen
  • Venkat Lakshminarayanan
  • Laurie R. Santos

Abstract

Behavioral economics has demonstrated systematic decision-making biases in both lab and field data. Do these biases extend across contexts, cultures, or even species? We investigate this question by introducing fiat currency and trade to a colony of capuchin monkeys and recovering their preferences over a range of goods and gambles. We show that capuchins react rationally to both price and wealth shocks but display several hallmark biases when faced with gambles, including reference dependence and loss aversion. Given our capuchins' inexperience with money and trade, these results suggest that loss aversion extends beyond humans and may be innate rather than learned.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 114 (2006)
Issue (Month): 3 (June)
Pages: 517-537

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Handle: RePEc:ucp:jpolec:v:114:y:2006:i:3:p:517-537

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Cited by:
  1. Rina Rosenblatt-Wisch, 2007. "Loss Aversion in Aggregate Macroeconomic Time Series," Working Papers 2007-06, Swiss National Bank.
  2. Timothy K. M. Beatty & Ian A. Crawford, 2011. "How Demanding Is the Revealed Preference Approach to Demand?," American Economic Review, American Economic Association, vol. 101(6), pages 2782-95, October.
  3. Brosnan, Sarah F., 2011. "An evolutionary perspective on morality," Journal of Economic Behavior & Organization, Elsevier, vol. 77(1), pages 23-30, January.
  4. Shani, Yaniv & Cepicka, Marie Christine & Shashar, Nadav, 2011. "Keeping up with the Joneses: Dolphins' search knowledge for knowledge's sake," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 418-424, June.
  5. Zak, Paul J., 2011. "Moral markets," Journal of Economic Behavior & Organization, Elsevier, vol. 77(2), pages 212-233, February.
  6. Avi Waksberg & Andrew Smith & Martin Burd, 2012. "A model of decision making in an ecologically realistic environment: Relative comparison and the Independence of Irrelevant Alternatives," Journal of Bioeconomics, Springer, vol. 14(3), pages 197-215, October.
  7. Viktar Fedaseyeu & Vitaliy Strohush, 2012. "Loans from the Government, Overinvestment by Households, and Asset Bubbles," Working Papers 443, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  8. Keisaku Higashida & Kenta Tanaka & Shunsuke Managi, 2011. "Is the behavior of fishers rational under Individual Transferable Quotas (ITQs) regimes? An Experimental Approach," Discussion Paper Series 73, School of Economics, Kwansei Gakuin University, revised Aug 2011.
  9. Benjamin Y. Hayden & Sarah R. Heilbronner & Amrita C. Nair & Michael L. Platt, 2008. "Cognitive influences on risk-seeking by rhesus macaques," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 3, pages 389-395, June.
  10. Simon Gaechter & Eric Johnson & Andreas Herrmann, 2007. "Individual-Level Loss Aversion In Riskless And Risky Choices," Discussion Papers 2007-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  11. Colin F. Camerer, 2013. "A Review Essay about Foundations of Neuroeconomic Analysis by Paul Glimcher," Journal of Economic Literature, American Economic Association, vol. 51(4), pages 1155-82, December.
  12. Sacha Bourgeois-Gironde & Catherine Tallon-Baudry & Meyniel Florent, 2011. "Fast and Automatic Activation of an Abstract Representation of Money in the Human Ventral Visual Pathway," Post-Print ijn_00713469, HAL.
  13. Pavlo Blavatskyy, 2011. "Loss aversion," Economic Theory, Springer, vol. 46(1), pages 127-148, January.
  14. Paolo Pin, 2006. "Selection matters," Working Papers 138, Department of Applied Mathematics, Università Ca' Foscari Venezia.
  15. Locke, Peter R. & Mann, Steven C., 2009. "Daily income target effects: Evidence from a large sample of professional commodities traders," Journal of Financial Markets, Elsevier, vol. 12(4), pages 814-831, November.
  16. Polman, Evan, 2012. "Self–other decision making and loss aversion," Organizational Behavior and Human Decision Processes, Elsevier, vol. 119(2), pages 141-150.
  17. Jan Heufer, 2013. "Testing revealed preferences for homotheticity with two-good experiments," Experimental Economics, Springer, vol. 16(1), pages 114-124, March.

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