The Endowment Effect in Orangutans
International Journal of Comparative Psychology, 2012, 25, 285-298
14 Pages Posted: 11 Oct 2013
Date Written: December 2012
The endowment effect is the seemingly irrationally tendency to immediately value a possessed item more than the opportunity to acquire the identical item when one does not already possess it. The phenomenon has broad legal implications, as it suggests a drag on trade, occasioned by inconsistent valuation of identical goods and rights. This in turn suggests that a deeper understanding of the origins and seemingly baffling variations in the magnitude of the effect, across different goods, could aid law’s more effective engagement with the phenomenon.
Although endowment effects are reported in chimpanzees and capuchin monkeys, both species share social traits with humans that might obscure the evolutionary origins of the phenomenon, absent further investigation. Specifically, those shared social traits make what biologists term “convergence” (a similar feature in two or more species that arose multiple times, independently) as likely an explanation as “homology” (inheritance from a common ancestor) for the evolution of cross-primate predispositions toward exhibiting endowment effects.
Orangutans provide a unique insight into the evolution of the endowment effect, along with other apparently irrational behaviors, because their less frequent social interactions and relatively more solitary social organization distinguishes them from the more gregarious apes, allowing a test of evolutionary homology.
Here, we report the first evidence of the endowment effect in a relatively less social primate, the orangutan. This indicates that this behavior may have evolved as a homology within the primates, rather than being due to convergent social pressures. These findings provide stronger evidence for the hypothesis that at least one bias, the endowment effect, may be common in primates and, potentially, other species.
Keywords: endowment effect, cognitive bias, behavioral economics, law, behavioral law and economics, time shifted rationality, orangutan, evolution, property, behavioral biology, evolutionary biology, evolutionary analysis in law, prospect theory, loss aversion, rationality, irrationality, adaptation
JEL Classification: K00, K11, K12, K19, K30, K39, D00, D81, H30
Suggested Citation: Suggested Citation