Tess Vigeland: We're only human, which means we sometimes do some cra-a-azy things with our money. OK, OK, I'm sure there are some of you out there saying, "Hey, I don't!" Well gold star for you.
But for the rest of us, it would be nice to know why we do what we do with money, right? Maybe it's evolution! Maybe we're hard-wired to do both smart and dumb things with our dollars. Some scientists at Yale are working on just that -- by studying what monkeys do with money. And Craig LeMoult of station WSHU paid them a visit recently.
Craig LeMoult: Nick Nack the capuchin monkey scurries onto a platform inside a lab at Yale and looks around.
He's the size of a small cat, with long limbs, a white face and tufts of hair at his temples. Two researchers in white lab coats stand on either side of the platform, facing away from him. They count...
Researcher: One, two, three.
And turn around. One offers him three pieces of cereal. The other offers just one. Nick Nack loves cereal. He goes over to the researcher with three pieces, puts down a metal token he's been holding in his paw and grabs the cereal. This monkey is using money.
Laurie Santos: These are guys that split off from humans about 35 million years ago, so they're a great window into what we used to look like, way back in the evolutionary day.
Laurie Santos is a psychologist and the lead researcher for the experiment. One day, she was talking to an economist friend about the financial meltdown. Santos was already studying the way monkeys make decisions, and they thought, what if we teach the monkeys to use money? Would they make the same decisions we do?
Santos: Maybe we can actually look to see if some of the strategies we're using that are making us go wrong, maybe those are some of the strategies that are built in.
Turns out it was pretty easy to train monkeys to swap tokens for food.
Santos: Then we put them in the context of this market, where they had choices of who to shop from. And the amazing thing was that they picked this up instantly and started paying attention to all kinds of rational things that humans pay attention to when they are in markets.
Earlier, the researchers had introduced Nick Nack to the idea of brands. They offered him two kinds of cereal, the same in every way except one came in a container with a picture of a clover on it and the other had a picture of a moon on it. The cereal was also the same price. And it turned out the branding didn't matter much to Nick Nack. He went for each about the same number of times.
But how would Nick Nack respond to a discount? Nick Nack knows one token usually buys him one piece of cereal. But today he's given the choice between one piece of the clover brand at the standard price or a buy-one-get-two-free deal on the moon brand.
He goes for the sale 14 out of 16 times.
Researcher: Thanks for playing!
It may not be surprising that a monkey knows enough to choose three treats over one. But in other studies, Santos has shown capuchins will choose food they like less, just because it's on sale. So a monkey may like grapes better than apples, but when given a choice, he'll choose the apples if he can get more of them at the same price.
Then Santos got to wondering, do capuchins let the price of something mess up their sense of its value?
Santos: What I mean by this is that just knowing the price of something can change our very experience of consuming that good.
First, I got Santos and her team to try this test out on humans.
Researchers: Free coffee!
They set up a little stand on the Yale campus, and offer people a taste test between two coffees. First:
Santos: This one's a Brazilian Direct. It's $3.64 a pound.
Then she asks them for an adjective to describe the taste.
Man 1: Pretty regular.
Santos: Alright. Let's see what you think of this one. This one's a Kenyan Select. This one is $10.92 a pound. A little bit more expensive.
Here's the thing: It's exactly the same coffee. She's just telling people one is three times more expensive.
Man 1: I think it has a better aftertaste. I like this one better.
After the taste test, people were offered a full cup of the coffee of their choice. Most of them chose what they thought was the expensive cup.
Rich Ombrembowski is a physician associate student at Yale.
Rich Ombrembowski: I think people have a predisposition to go with or like coffees and things that are more expensive.
Santos: Do you think that's a smart strategy?
Ombrembowski: It depends on what you're looking for, I guess.
But it's the same coffee. To Santos, it's an error in logic. So then the questions is: Are we evolutionarily programmed to make this mistake? Do monkeys do this, too?
Back at the lab, the monkeys are taking part in the same experiment. But instead of coffee, they're using jello. Yes, monkeys love jello, too. A capuchin named Jill scampers into the marketplace. Her token buys either one cube of green jello or three blue cubes. Green or blue, the cubes taste all the same, but Jill has learned the green is three times more expensive than blue.
But today is free jello day! One of the researchers turns around and offers Jill both flavors. If she were human, Jill might be tempted to take the more expensive option, the green cube.
Researcher: Blue, good choice!
But Jill doesn't stick with blue. Sometimes, she chooses green. What's clear is, she doesn't automatically prefer the more expensive option.
Santos: And that's really striking, it's telling us that Jill is thinking about these differently priced goods in a very different way than a human might think of these differently priced goods.
This is still unpublished research. But does it suggest monkeys are smarter than we are about money? Both species love to get more for less. Santos has even shown monkeys, like people, are prone to take greater risks to avoid losses.
But unlike monkeys, we understand and act on abstract concepts like value. It's why we're able to convince ourselves more expensive coffee tastes better than cheap coffee -- even when it's the same coffee.
Santos: It might be some of the smarter things that we do, the more complicated things that we understand that actually drive us to make errors.
Monkeys don't have to worry about these kinds of things. And yeah, that's primarily because most monkeys don't use money. But the few that do are at least smart enough to keep things simple.
I'm Craig LeMoult for Marketplace Money.
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