Monkey Economics
You haven't heard of monkey economics? That's probably because
I just invented the term. However, there have been some interesting
experiments done with monkeys which shed light on the evolutionary
economics of humans.
Haven't heard of evolutionary economics? That's not surprising
either. It's a relatively new area of study that looks into the
biological and evolutionary forces and developments which explain
our economic decisions - especially our seemingly irrational
ones. Behavioral economics, a related field, describes how we
make money and trade decisions, while the evolutionary perspective
is all about hypothesizing why we make the decisions we make.
Studies In Monkey Economics
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 a stone for a cucumber slice,
a good deal from their perspective. There was usually a 95% rate
of cooperation. But when one of the monkeys was given a grape
- which is more highly valued - the monkey getting the cucumber
slice suddenly didn't make the trade nearly as often. In fact,
the cooperation rate dropped to 60%. Sometimes the monkeys simply
refused to take the slice at all, even having handed over the
stone. Apparently they would rather go hungry than be "taken
advantage of" in an unfair exchange.
It seems that all primates including us have evolved a emotional
sense of justice or fairness. This may have helped maintain harmony
in the small groups we lived in thousands of years ago - a common
evolutionary hypothesis. Oh, but we haven't covered the human
experiments.
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 gets anything.
Rationally, player two should always say yes, since even if
the split proposed is $95 and $5, that $5 is still better than
nothing. There is nothing to be gained (financially) by saying
no. Players know they won't be playing again, so a reputation
for turning down a low proposal gives them no advantage.
Interestingly, while people mostly accept "reasonable"
proposals, the obvious one being a 50/50 split, they refuse many
"unreasonable" ones. Specifically, most players turn
down proposals that give them less than 30% of the money. Why
turn down free money? Many simply say it isn't fair.
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 it would be more advantageous
to take the money now, our minds are still functioning as they
have for hundreds of thousands of years.
Now here is a thought: Hundreds of millions of modern 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? Not likely. It is more likely 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.
Where will money 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. Though they result from
the hard-wiring of our brains, according to the scientific theories,
our "software" or conscious mind can evolve more quickly.
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