Evolutionary Origins of the Endowment Effect: Evidence from Hunter-Gatherers
13 Pages Posted: 24 Apr 2013 Last revised: 7 Sep 2014
Date Written: August 23, 2013
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.
Keywords: endowment effect, loss aversion
JEL Classification: C93, D03, D81
Suggested Citation: Suggested Citation