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Evolutionary Origins of the Endowment Effect: Evidence from Hunter-Gatherers

13 Pages Posted: 24 Apr 2013 Last revised: 7 Sep 2014

Coren L Apicella

University of Pennsylvania - Department of Psychology

Eduardo M. Azevedo

University of Pennsylvania - The Wharton School

Nicholas A. Christakis

Yale University - Yale

James H. Fowler

UC San Diego Division of Social Sciences; UC San Diego School of Medicine

Date Written: August 23, 2013

Abstract

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

Apicella, Coren L and Azevedo, Eduardo M. and Christakis, Nicholas A. and Fowler, James H., Evolutionary Origins of the Endowment Effect: Evidence from Hunter-Gatherers (August 23, 2013). American Economic Review, 104 (6) 1793-1805, 2014. Available at SSRN: https://ssrn.com/abstract=2255650 or http://dx.doi.org/10.2139/ssrn.2255650

Coren L Apicella (Contact Author)

University of Pennsylvania - Department of Psychology ( email )

3815 Walnut Street
Philadelphia, PA 19104-6196
United States

Eduardo M. Azevedo

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

HOME PAGE: http://www.eduardoMazevedo.com

Nicholas A. Christakis

Yale University - Yale ( email )

127 Wall Street
New Haven, CT 06511
United States

James H. Fowler

UC San Diego Division of Social Sciences ( email )

9500 Gilman Drive
Code 0521
La Jolla, CA 92093-0521
United States

HOME PAGE: http://jhfowler.ucsd.edu

UC San Diego School of Medicine ( email )

9500 Gilman Drive
MC 0507
La Jolla, CA 92093
United States

HOME PAGE: http://jhfowler.ucsd.edu

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