Risk aversion and making suboptimal decisions is hard wired into our evolutionary biology. This seems to be the finding of tests on Simian monkeys and their responses to a variety of reward systems.

Essentially, just like humans, the monkeys demonstrate a preference for avoiding loss over the prospect of an extra gain. MRI scans have shown that we compute losses and gains in different parts of the brain, so the latest tests on monkeys revealing they too have a loss aversion suggests some older biological need is being answered.

The Economist reasons that in our natural habitat food supply is erratic, so that the pangs of hunger are felt more keenly than the prospect of abundance. While agriculture and the affluent society have changed all that on the “supply side”, we retain the attitudes of the hunter-gatherer.

In an information society, it becomes much more important to understand these biological drivers and the biases they build into our evaluation processes.

Experience suggests these features of human behaviour are better understood by marketers than economists. As has been observed before, they know the power of the statement “Hurry, while stocks last!”

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