Sunday, June 26, 2005

monkey economics (and brothels)

This is a fun one: researchers trained capuchin monkeys to understand tokens as currency by letting them exchange them for food. Then they did all sorts of behavioral economics-y tests like finding consistency of preferences revealed in price shocks. The monkeys even displayed loss aversion at rates almost identical to humans! And along the way they got "prostitution":

Something else happened during that chaotic scene, something that convinced Chen of the monkeys’ true grasp of money. Perhaps the most distinguishing characteristic of money, after all, is its fungibility, the fact that it can be used to buy not just food but anything. During the chaos in the monkey cage, Chen saw something out of the corner of his eye that he would later try to play down but in his heart of hearts he knew to be true. What he witnessed was probably the first observed exchange of money for sex in the history of monkeykind. (Further proof that the monkeys truly understood money: the monkey who was paid for sex immediately traded the token in for a grape.)

Mark Liberman interestingly points out the monkeys seem to be an exception to Adam Smith's assertion that animals don't do trades; but since capuchins still have simple cognition and no language abilities, the human behavior of trade can't be based on uniquely human cognitive capabilities like Smith argues.

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