Lakshminarayna and Santos - EE in Capuchin Monkeys Flashcards
(12 cards)
How was Experiment 1 designed to test for the endowment effect in monkeys?
Monkeys were endowed with one food item (e.g., cereal disc) and given the opportunity to exchange it for an equivalent food item (e.g., fruit chunks) that they had previously valued equally in baseline sessions.
What is the main finding of Lakshminarayanan and Santos’ study on capuchin monkeys?
The study found that capuchin monkeys exhibit the endowment effect - they prefer to keep food they already possess rather than trading it for equivalent food items, suggesting that this bias may have evolutionary origins predating humans.
What were the results of Experiment 1 and what did they indicate?
Monkeys traded for the equivalent reward only about 15% of the time, showing a strong preference to keep their endowed food rather than exchange it for an equivalent item. This suggests the presence of an endowment effect.
How did monkeys respond when offered a higher-value treat in exchange for their endowed food?
Monkeys exchanged cereal discs for the higher-value Fru-Fru about 80% of the time, and fruit for Fru-Fru about 90% of the time, showing that while the endowment effect could be overcome with higher-value alternatives.
How did the study address the transaction costs explanation for the endowment effect?
The study controlled for transaction costs by measuring the effort monkeys were willing to expend and by providing additional compensation (oats) to offset potential costs. The endowment effect persisted, suggesting transaction costs alone cannot explain the phenomenon.
What does the monkey study suggest about reference-dependent preferences?
The study supports the theory of reference-dependent preferences, showing that monkeys evaluate potential trades relative to their current endowment (reference point), not based on absolute value. This aligns with prospect theory’s prediction that losses loom larger than gains.
Under what conditions were monkeys willing to overcome the endowment effect?
Monkeys were more willing to trade when offered significantly higher-value alternatives (like the Fru-Fru treat), suggesting that while the endowment effect is robust, it can be overcome when potential gains are sufficiently large.
What broader implications does this research have outside economic theory?
The research suggests that cognitive biases often considered irrational or suboptimal may have served adaptive functions throughout evolutionary history. It connects behavioral economics with evolutionary biology and comparative psychology.
What was Borsvert’s (2011) criticism of this paper?
Questioned if this definitively showed a Endowment Effect. Might instead reflect basic risk aversion or evaluation uncertainty.
What could be a criticism levelled at the use of Food behaviour for this experiment?
Critics have noted that hunger levels and food motivation could significantly impact trading behaviour independent of the endowment effect.
Capuchin’s endowment effect may be limited to food contexts, potentially reflecting feeding ecology rather than general economic bias
Which experiement saw more that 50% trade that was statistically significant?
Experiment 2 - with the FFRU. 93.3% trade in the case of Fruit Discs, 81.67% with Cerial
What was the follow up test in Experiment 4?
This was where the monkeys were set to choose hard to eat almonds (what they had) vs easy to eat almonds. They did not trade much (significantly less than 50%) with less time intensive foods. This supports hypothesis of endowment effect.
