Treasury Today Country Profiles in association with Citi

Giving investors the bird

Parrot scratching head in confusion

Forget AI and complex algorithms; all you need to make complex decisions is a parrot.

According to experts at the Max Planck Institute of Ornithology in Germany, the colourful Psittaciformes are quite capable of making complex economic decisions.

As part of an experiment, 33 macaws and African grey parrots were taught to recognise the value of tokens which could be exchanged for food.

The birds were required to ‘invest’ their tokens either in low-value immediate rewards of dry corn or sunflower seeds, or in the higher-value but delayed reward of pieces of walnut.

The choice of a poor yield now, or a longer-term punt on a higher value return, saw the parrots consistently choose the latter.

Nine great green macaws, eight blue-throated macaws, eight blue-headed macaws and eight African grey parrots took part in the study. The great green macaws made the right decisions significantly more often than expected by chance in every test.

Although it is difficult to know if this behaviour is part of the parrots’ natural life, these birds are clearly more astute than expected, having performed as well as chimpanzees being tested on the same parameters.

“In our experimental setting we have found that they are capable of making surprisingly subtle decisions to maximise their payoff while minimising their effort,” said lead researcher, Dr Auguste von Bayern. “This is a fascinating indication that such decisions may matter greatly in their natural environment.” A study of the parrot approach to seed funding has not been ordered.