Evolutionary Origins of the Endowment Effect: Evidence from Hunter-Gatherers
Coren L Apicella
University of Pennsylvania - Department of Psychology
Eduardo M. Azevedo
University of Pennsylvania - The Wharton School
Nicholas A. Christakis
James H. Fowler
UC San Diego Division of Social Sciences; UC San Diego School of Medicine
August 23, 2013
American Economic Review, 104 (6) 1793-1805, 2014
The endowment effect, the tendency to value possessions more than non-possessions, is a well known departure from rational choice and has been replicated in numerous settings. We investigate the universality of the endowment effect, its evolutionary significance, and its dependence on environmental factors.
We experimentally test for the endowment effect in an isolated and evolutionarily relevant population of hunter-gatherers, the Hadza Bushmen of Northern Tanzania. We find that Hadza living in isolated regions do not display the endowment effect, while Hadza living in a geographic region with increased exposure to modern society and markets do display the endowment effect.
Number of Pages in PDF File: 13
Keywords: endowment effect, loss aversion
JEL Classification: C93, D03, D81
Date posted: April 24, 2013 ; Last revised: September 7, 2014
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