We're no better than monkeys

The basic economic theory that people work harder to avoid losing money than they do to make money is shared by monkeys, suggesting this trait has a long evolutionary history, according to a study conducted by M. Keith Chen, Venkat Lakshminaryanan, and Laurie Santos.

This phenomenon, known as "loss aversion," refers to the tendency for people to strongly prefer avoiding losses to acquiring gains. In this study, tufted capuchin monkeys were given small disks to trade for rewards—apples, grapes or gelatin cubes. The monkeys were given a budget of disks and asked to decide how much to spend on apples, and how much to spend on the gelatin cubes, even as the prices of these goods and the size of their budgets fluctuated. Capuchins performed much like humans do. Capuchins, like humans, react rationally to these fluctuations.

"The economic view says people are aware, rational and in control of their major decisions," said Chen. "Social psychology cuts in the opposite direction, maintaining that people are often unaware of the forces that dictate their behavior. We wanted to understand the interactions of these two things. What we’ve shown is that capuchin monkeys look remarkably like us; making rational decisions in many of the same settings that humans get right, but also make many of the same mistakes we make."

Their work provides an evolutionary spin on the current debate about why Americans do not save enough for retirement or put enough of their savings into the stock market. "We are fighting tendencies that may be biologically hard-wired," said Chen.