[Tams]

Laurie Santos: A monkey economy as irrational as ours

Laurie Santos looks for the roots of human irrationality by watching the way our primate relatives make decisions. A clever series of experiments in "monkeynomics" shows that some of the silly choices we make, monkeys make too.

About Laurie Santos

Laurie Santos studies primate psychology and monkeynomics -- testing problems in human psychology on primates, who (not so surprisingly) have many of the same predictable irrationalities we do.

click here to see the video
http://www.ted.com/talks/laurie_santos.html


Do you see any monkeys in you?

[macdfx]

YouTube version for your viewing pleasure:

Laurie Santos: How monkeys mirror human irrationality

Laurie Santos: How monkeys mirror human irrationality

[SIUYA]

The one good thing about human irrationality is that our irrationality can be measured, and we can in fact be reliably predictable in our irrationality.

A good related read is "Predictably Irrational" - Dan Ariely

It is hard now-a-days for humans to behave rationally. Most of us belong to a caste of slaves.

My example (typical European):

Let's assume I earn $100 per month, then I have to pay / deduct form my salary:
- 30% income tax
- 24%of social and health taxes
(jointly 54%)
I am left with $46, i.e.(i) 46% of initial income and with (ii) pretty non-existing Ponzi-like wellfare scheme.

Okay, I have $46 in my pocket. Is this all? No! All goods I buy are more expensive because of 22% VAT. From initial $100 I now have only $35.88.

From this I have to deduct roughly 10% for other taxes like excise on petrol and other stuff, import taxes that make the goods I buy more expensive + real estate tax + all goods are a few cents more expensive because companies also pay income taxes that must be calculated in goods' prices and the companies' owners pay dividend taxes and to make both ends meet they have to ''hide'' their needs in the prices of goods. I am left with $32.29

Is this all? Not really.

1. If I am to spend the money for a pencil this means that:

(i) a timber man who cut the tree also had to pay 54% of income tax and social welfare; he also paid VAT on petrol, he also paid excise on petrol;
(ii) the guy who make the pencil graphite had to pay all these taxes + real-estate tax for the land on which his factory is placed, etc...
(iii) the guy who assembles the pencils also had to pay all these taxes....
(iv) the shop assistant also has to pay his taxes

2. The shop assistant who sold me the pencil has to go to a dentist:
(i) the dentist has to pay these taxes as well
(ii) the dentist uses equipment which was made by people who also have to pay taxes...

You are beginning to see the pattern... I hope. The pattern goes 4.36 times down deep (statistically).

From original $100 I am left with $9,37, ergo my purchasing power would have been 10 times higher if there were no taxes.

In feudalism people have to pay 10% to their master.
We now-a-days have to pay 90% to your master (the state).

In ancient Rome a slave had the right to retain 10% of the earnings.
Now-a-days we have the right to retain 10% of your earnings as well, which makes as slaves, whether we like to admit the reality or not.

Humans now-a-days have liberties similar to those of the monkeys' put in a lab cage.


The problem I have with Laurie Santos' research is: monkeys in cage are slaves as humans are now. Both humans and monkeys tend to behave irrationally during certain decision making prcesses (always or only when enslaved?)

I wonder what the outcome of the research would be, if tested were (i) non-slave monkeys in an African jugle and (ii) non-slave humans of 18th century.

Would her conclusion be that our irrationality is the heritage of million years evolution or is it just a result of recent enslavement?

Just curious...

[Tradewinds]

The interesting part was that monkeys seem to engage different means of making a decision when the focus turns to potential loss, rather than the focus being on gain. The behavior of not wanting to accept loss, and being very bad at rational decisions to minimize loss, seems to be "hard wired" in both monkeys and humans.