Error of Ommission

Watch the following video:

https://www.ted.com/talks/laurie_santos_a_monkey_economy_as_irrational_as_ours?language=en Links to an external site.

In class, we have discussed the “error of omission”; namely, the fact that 2/3 of households end up at age 65, typical retirement age, with little or no money or assets.

In the video, Prof. Santos seeks to understand why people are so bad at saving. Her premise is that this is a genetic, inherited trait – she argues that the similar behavior seen among a monkey economy is proof of this – specifically, monkeys don’t save and they make irrational decisions about risk versus return. However, Santos says that we differ from monkeys in one very important respect – human beings can learn to do better in making financial decisions (whereas monkeys and other animals cannot).

Question: (a) Do you believe Santos’ argument that the observed behavior in her monkey economy is evidence that the bad financial behavior of human beings is inherently genetic? (b) Do you think that the Santos experimental monkey economy provides some explanation of why 2/3 of households end up poor at age 65? (150-250 words)

comment in these two posts, each comment could be 50-100 words.