The critical question was, would monkeys mess up in the same way humans do when confronted by similar financial challenges? In a series of ingenious preference experiments that involved salesmen adding to or subtracting from the amount of food on offer for each token, the team tested if the monkeys’ decisions demonstrated loss aversion and reference dependence.
In one experiment, the salesmen offered the same average payoff of one-and-a-half apple pieces, but in different ways. One salesman began every trade showing two apple pieces. When he was paid, he either delivered the two pieces or removed one, delivering less than the monkeys expected. The other salesman started with one piece, but when paid, either delivered one or added a second piece. The monkeys strongly preferred the second scenario and disliked the first, where one piece of apple was taken away – even though the average payoff was the same.
Throughout the various experiments, Santos and her colleagues showed that the capuchins represented their payoffs relative to arbitrary reference points and appeared to avoid gambles framed as losses. The researchers then went on to examine whether capuchins demonstrate an endowment effect (Thaler, 1980), a phenomenon in which ownership increases an object’s value. Again, the test showed that the monkeys demonstrated a true effect (see Santos and Chen, 2006).
“The endowment effect was less surprising. We had already shown that the capuchins were rational in certain aspects of their markets in the same way that humans are. In some sense it was comforting that the same spots where humans go wrong when making financial decisions may be shared with these monkeys,” Santos says.