How Not to Buy Diamonds Like a Capuchin Monkey



In a Wall Street Journal article from March 2012, there was a report about a researcher at Yale whose work with Capuchin monkeys investigates how they buy in comparison with people. One study showed that, when shown two items but only getting one of them versus being shown one and getting one, they preferred the latter more straightforward transaction.

This desire for clarity is not so different from people, but, given the language barrier, I wonder how the monkeys knew they were actually being offered a choice, rather than a two-for-one. Could they ever know the difference? I imagine being presented with more than one item at a time gives even the brightest Capuchin a problem of interpretation. Simpler to be shown one, buy one, but this is not the way to tell value. Neither, as it turns out, is merely comparing two items.

My message is that a skilled fine jewelry salesperson should offer you three choices, because conscious buying requires contrast – the trade-off between higher quality and smaller size, versus lower and bigger, and one somewhere in the middle. This may seem obvious, but two things make it harder to come by than you might think. One is that the cost of this stuff may limit what you’re shown to what sells the most. Another is a salesperson's fear that either you’ll become confused, or that the salesperson will. It's true that, in this business, subtle differences in relatively small objects lead to dramatic differences in value. But many, probably most, consumers have as good an eye as the salesperson they're working with, and only need to be shown the right spread of qualities, and an educated eye to point out the differences, to learn to trust themselves and see them too.

You will find out quickly if you are working with someone who can guide you to which diamond is showing less body color or more brilliance than another. That person will enable you to see it with your own eyes. Then you will understand why one thing is worth more than something else. At some level, what makes one stone worth more than another is always visible, if you have the time to learn all the features. It is actually surprisingly easy, with only a little help.

Of course, this is more information than some shoppers want. You might accept being presented with only one choice at Tiffany's because you trust the brand and assume it's of high quality (and you're there for the experience as much as for the diamond). All things being what they usually are, you'll be right. The concept of branding is a high-level time-saving maneuver that only human beings are capable of, and it creates value through the story of where and how something was acquired and the status it conferred on the buyers.

These are sensitive times we live in, and I intend no disrespect towards Capuchin monkeys. Consider the Veblen effect, which says that, in luxury goods, higher prices may increase people's perception of their worth and consequently cause them to pay more. The researchers in the Wall Street Journal article wondered about this. "For the same number of tokens, the monkeys could choose whether they got a tiny square of blue Jell-O or a big chunk of of red Jell-O…[but they] gorged happily on both."

“Some might argue,” the article continues, “that human economic behavior is more advanced since it includes ‘culture and meta-awareness’ in decision-making." Or, quoting the principal investigator, it might mean "the monkeys are more rational." I think that to say that value is a matter of perception is only the beginning of wisdom on the matter: what kind of perception to whom (or which species) is to enter it more deeply. Start by making comparisons with awareness, and you be on the right road.