Chen on Ancient Economic Biases
Behavioral economists have found that people are subject to psychological biases that can cause us to act irrationally in economic situations. For example, we tend to feel the pain of the loss of a sum of money more acutely than we feel the satisfaction of a gain of the same amount. This phenomenon, called loss aversion, can lead to self-defeating strategies in the stock market.
M. Keith Chen, an associate professor of economics at Yale SOM, has done a series of experiments examining the economic behavior of monkeys. His studies show that capuchin monkeys are subject to some of the same biases as humans, including loss aversion. These findings suggest that these biases are deeply ingrained in us, having originated in a common ancestor millions of years ago.