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

Posted: 25 Jun 2006

See all articles by M. Keith Chen

M. Keith Chen

University of California, Los Angeles (UCLA) - Anderson School of Management

Venkat Lakshminarayanan

Yale University

Laurie Santos

Yale University - Department of Psychology

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.

Suggested Citation

Chen, Keith and Lakshminarayanan, Venkat and Santos, Laurie, How Basic are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior. Journal of Political Economy, Vol. 114, pp. 517-537, June 2006, Available at SSRN: https://ssrn.com/abstract=911244

Keith Chen (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

HOME PAGE: http://www.anderson.ucla.edu/faculty/keith.chen/index.html

Venkat Lakshminarayanan

Yale University ( email )

New Haven, CT 06520
United States

Laurie Santos

Yale University - Department of Psychology ( email )

P.O. Box 208205
New Haven, CT 06520-8205
United States

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