Risk Aversion — Bees Do It Too
Nice op-ed piece by Michael Shermer in today’s LA Times. The main point (of both the op-ed and his nifty new book, “The Mind of the Market”) is that people aren’t fully and consistently rational in how they deal with money.
When it comes to dealing with gambles, Shermer notes that monkeys behave a lot like humans: they tend to be risk averse (i.e., prefer a sure thing over a gamble with an equivalent expectation). He goes on to wonder in awe about a common evolutionary thread that would lead us and our primate relatives to share this feature:
It is extremely unlikely that this common trait would have evolved independently and in parallel between multiple primate species at different times and different places around the world. Instead, there is an early evolutionary origin for such preferences and biases, and these traits evolved in a common ancestor to monkeys, apes and humans and was then passed down through the generations.”
What Shermer fails to note is that risk aversion is exhibited in far more than just humans and other primates. Bees, for example, have been pretty thoroughly studied; when it comes to foraging, they’d rather have a sure thing than taking a chance. This probably means there’s something pretty fundamental when it comes to attitudes toward risk.
P.S. Steep discounting (i.e., preferring a sure reward today over a sure reward later) is another potentially “irrational” approach to decision making. It was first studied in pigeons (at the Harvard Pigeon Lab) back in 1967.
