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Monkey Economics and Human Evolution

I enjoy discovering and reading about research in some of the lesser-known fields, so I was happy to stumble upon a few studies about how monkeys deal with decisions about trading values. And although I may have just invented the term "monkey economics" the research is real. In particular there have been some interesting experiments done with these primates which shed light on the evolutionary economics of humans.

I did not invent or name the field of "evolutionary economics," by the way. It's a relatively new area of study that looks into the biological and evolutionary forces and developments which explain the economic decisions we make, and especially our seemingly irrational ones. It's related to the field of behavioral economics, which describes how we make decisions about money and trade.

Now, about those monkeys. Actually the research has been done with both chimpanzees and monkeys. In one experiment at Emory University, when two primates participated in a mutual task for which one was rewarded, the second one stopped helping out in future tasks if the first didn't share the rewards. That seems rational, and very human-like.

However, monkeys also seem to share with humans the extreme and seemingly irrational tendency to hurt their own self-interest in order to protest unfairness. Pairs of capuchin monkeys, for example, were trained to trade researchers a stone for a cucumber slice, which was a pretty good deal from their perspective; they averaged a 95% rate of cooperation in this arrangement. But when one of the monkey pair was given a grape, which, in the monkey marketplace, is more highly valued than a cucumber slice, the other monkey who still could trade a stone for a slice of cucumber suddenly didn't make the trade nearly as often. In fact, the cooperation rate dropped to 60%. Sometimes the monkeys who got the lower payment for their stones simply refused to take the slice at all, even after they handed over the stone.

Apparently they would rather go hungry than be "taken advantage of" in such an unfair exchange. Their sense of justice seemed to overrule their own self-interest. We are not the only primates to have evolved an emotional sense of justice or fairness. This development may have helped maintain harmony in the small groups we lived in thousands of years ago, or at least that's a common evolutionary hypothesis. Now let's look at the human experiments, but not before I mention my post on the first recorded instance of monkey prostitution. You'll find that on my personal blog.

Evolutionary Economics and Irrationality

There is an experiment economists call the "Ultimatum Game," which is typically played with two people. They are given $100 to split between them, but player one gets to propose how to divide it. She might suggest that she gets $80, for example, while the other "player" gets $20. Player two can say yes, and each will get his or her designated share. If player 2 says no, neither one gets anything at all.

Rationally, player two should always say yes, since even if the split proposed is $95 and $5, the $5 he or she will receive is still better than nothing. There is nothing to be gained financially by saying no. You might think there is the matter of setting a precedent to consider, but the players in this laboratory game know they won't be playing again, so a reputation for turning down a low proposal gives them no advantage at all.

Interestingly, while subjects mostly accept "reasonable" proposals, the obvious one being a 50/50 split, they commonly refuse many "unreasonable" ones. To be more precise, most players turn down proposals that give them less than 30% of the money. Why do they turn down free money? Many simply explain that it isn't fair. Fairness, apparently, requires them to turn down their own share just to punish the other subject for making the unfair offer.

Scientists working in the area of evolutionary economics hypothesize that we have a built-in sense of "reciprocal altruism," which evolved over tens or hundreds of thousands of years. This emotional reaction demands fairness, and must have provided some advantage to the human species, even at the expense of personal gain. Though the world is changed, and perhaps we can rationally argue that now it would be more advantageous to take the money in a situation like this, our minds are still functioning as they have for hundreds of thousands of years.

Now here is a thought that comes to mind when reading about studies like these: Hundreds of millions of workers in poor countries make a tenth of what others make for the same work in wealthier countries, so why don't they quit? Are they overcoming the monkey-mind that throws away a cucumber slice if a grape can't be had? It doesn't seem very probable. It is more likely just a matter of proximity. They don't work near the higher-paid workers, but around others who make the same low wages. Of course, it could also just be too obviously irrational to starve for a feeling of fairness, even if lesser pains will be suffered for the principle (and I suspect that if you or I were in an ultimatum game where a million-dollar prize was split 20% and 80% in favor of our opponent/partner, we would overcome our inherent sense of fairness and take the $200,000 versus nothing).

Where will monkey economics and other investigations into evolutionary economics lead? It seems likely that in addition to the irrational responses to the "Ultimatum Game," we can identify other common self-defeating economic behaviors that take place in daily life, and then correct them. Scientists may be right in hypothesizing that these irrationalities result from the actual physical arrangement of our brains based on evolution, but our "software" or conscious mind can evolve more quickly than our hardware.

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Monkey Economics