Monkeys Exhibit the Same Economic Irrationality As Us 254
grrlscientist writes "Laurie Santos is trying to find the roots of human irrationality by watching the way our primates make decisions. This video documents a clever series of experiments in 'monkeynomics' and shows that some of the stupid decisions we make are made by our primate relatives too."
As the only /.er who actually watched the video... (Score:5, Informative)
First of all, you need to skip to minute 9 before you start getting any info. And if you read the book Super Freakonomics, you already know everything in the 20-minute video:
- Monkeys steal money from each other, as do humans.
- Monkeys are terrible savers, as are humans.
- Monkeys are poor calculators of risk/reward, as are humans. (She goes on for about 8 minutes belaboring this point.)
And the goal for us as humans is to use our logic to overcome our emotions. There, I have now saved you 20 minutes of your life!
Old News (Score:2, Informative)
She published this in 2006.
Chen, M. K., Lakshminaryanan, V. & Santos, L. R. (2006). The evolution of our preferences: Evidence from capuchin monkey trading behavior. Journal of Political Economy, 114(3). 517-537
Re:Irrational Market Behavior (Score:2, Informative)
Specifically, the "Efficient Market Hypothesis", in which it is proposed that the price for a good or service ALWAYS reflects ALL available information, implicitly assumes that market actors are acting rationally.
Actually, it's not a good or service that the EMH refers to, but rather the market price of publicly-traded equities, bonds and commodities in an environment in which there are relatively low transaction fees. You should read more here [wikipedia.org] before posting about it, although since you got a rating of "5" maybe only cursory knowledge is required?
Re:Irrational Market Behavior (Score:3, Informative)
Well, the electorate chooses the legislators, and they are supposed to be chosing those of a finer clay to govern.
Re:Irrational Market Behavior (Score:3, Informative)
The Keynesians do have one strong point in their favor: there's a lot of evidence that Keynesian spending helped during the Great Depression. I mean, look at what happened to the national debt during WWII, when the US managed to crawl out of the mess they were in:
http://upload.wikimedia.org/wikipedia/commons/3/3b/USDebt.png [wikimedia.org]
Bush and Obama haven't gone anywhere remotely near where FDR went to finance that war.
The EMH supporters, on the other hand, have not had their theories demonstrably having the effects they expected.
Of course, there's another way of looking at this: all software sucks, all hardware sucks, all economic theories suck. We haven't come remotely close to figuring it out.
Comment removed (Score:5, Informative)
Re:Irrational Market Behavior (Score:3, Informative)
Nobody ever got rich by spending more money than they have.
Lots of bankers would disagree.
Re:Irrational Market Behavior (Score:3, Informative)
Or you could get really incredibly radical and try injecting the stimulus at the bottom of the socio-economic scale for a change. That, somehow, never gets tried.