Monkey See, Monkey Do: What can make humans (and monkeys) make poor money decisions?
Hey gang!
Excited to be here with you in this new exciting little venture. Thanks for signing up to the newsletter, you are not only clearly someone who puts a lot of effort into your own learning, but clearly cares about showing up and making an impact.
I'll do my very very best to make sure this newsletter helps you create great BOLD things at work.
If I end up wasting your time you have my full permission to force-feed me liquorice allsorts. Which are quite frankly disgusting and should be outlawed. IHMO.
I figured to start you off on this behavioural journey it would be wise to think about the evolutionary origins of our decision-making quirks.
What happens when you give monkey's money?
Laurie Santos and her team at Yale University conducted a groundbreaking experiment to understand the decision-making biases of monkeys.
They wanted to know if it was just humans who make financial errors, or if you gave monkeys their own form of currency would they make similar mistakes?
The Experiment
So, in the experiment, they introduced monkeys to a token economy where these primates could trade metal tokens for food. They could 'spend' a token with one of the researchers, and in exchange, they would get a food item.
But that's simple right?
The researchers then introduced different value foods. A humble cucumber was low value, and a grape was a rather sexy high-value commodity.
What those cheeky monkeys did next...
The monkeys quickly learned to make choices between different food items, often opting for the higher-value grapes over the cucumbers.
That seems rational logic to me.
The experiment got even more interesting when the researchers started to manipulate the outcomes.
Some researchers would occasionally "cheat" the monkeys by giving them less food than expected or none at all. The monkeys, demonstrating loss aversion, soon began to avoid those researchers, preferring to trade with those who consistently gave them the expected amount of food.
In short, they shot the messenger.
The monkeys then started to spend all their tokens immediately, showing no inclination to save for future trades. Sound familiar?
BUT MUM, it's SO unfair!
Our monkey friends also reacted strongly to the perceived unfairness.
When one monkey saw another getting a grape while they received a cucumber for the same token, the first monkey threw the cucumber back at the researcher in protest.
You can watch the cheeky monkey doing this here:
Your BOLD challenge for the week
Well, they proved it. We have strikingly similar parallels to monkey financial habits and decision-making processes. Here are some coaching prompts from the monkeys to help you at work.
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Addressing Loss Aversion:
- What recent decisions might have been driven by a fear of loss rather than potential gains?
- How can we reframe these situations to focus on the benefits rather than the risks?
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Shifting from Short-Term to Long-Term Focus:
- Are we prioritising immediate rewards over long-term benefits in our current projects?
- What steps can we take this week to plan better for the future?
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Improving Perception of Fairness:
- Where do we see potential feelings of unfairness in our team?
- How can we ensure that rewards and recognition are distributed more equitably?
That's it from me! Longer than hoped but I hope you enjoyed it.
What did you think? Any improvements?
Have a great weekend, and I'll return to your inbox next Friday.
Over and out,
Alex
(P.S. Put my hours of research into good use! If you enjoyed this please share with someone who would enjoy it :-)
