Perceived value of an object that comes from the mere fact of owning it, known as the "endowment effect" is not believed to have been present in early hunter-gatherer societies.
In typical endowment effect tests participants are given two items and asked if they would like to trade one for the other. Which of the two items the subject begins with is chosen randomly, so logically the person should want to trade for the more favorable object half of the time, a University of Pennsylvania news release reported.
"What we see, however, is that people trade only about 10 percent of the time," Eduardo Azevedo, an assistant professor in Wharton's Department of Business Economics and Public Policy, said. "Simply telling someone they own something makes them value it more. That is, the way you ask the question changes what item people prefer, unlike what you would expect from rational economic behavior."
A hole in this research is that the study is almost always conducted on people from what is called WEIRD ("western, educated, industrialized, rich and democratic") societies.
The researchers decided to apply the test to the Hadza people of Tanzania, who are one of the last hunter-gatherer societies left in the world and share all of their possessions with each-other.
"We wanted to examine whether the endowment effect was something that occurs in non-WEIRD societies, since they represent the vast majority of human populations that have ever existed," Coren Apicella, an assistant professor in Penn's School of Arts and Sciences', said. "Even if it's not a perfect window into our past, it's at least a different perspective than what you get when you study your average college student. The fact that the Hadza remain relatively isolated from Western culture, media and ideals makes them a good group with which to investigate the history and universality of biases like the endowment effect."
Some of the Hadza are separated from a nearby village by a lake, while others are not. Those living on the side of the lake closer to the village have considerably more frequent interactions with tourists, and even sometimes engage in transactions at the village's stores.
The team gave the Hazda items to trade that were fairly similar to each other, such as two different flavors of cookies or colors of lighters.
"We wanted to use both food and tools, as experiments with non-human primates show an endowment effect for the former but not the latter," Apicella said. "However, we saw that it didn't make a difference whether a person was choosing between cookies or lighters. The difference-maker was their relative level of isolation from modern life."
"The more isolated Hadza traded about 50 percent of the time - which is what rational people should do," Azevedo said. People near the village traded about 25 percent of the time, which is much closer to the 10 percent we see with Western students," Apicella said.
The researchers believe the conclusion could suggest exposure to capitalistic society could be responsible for the endowment effect. It could also be caused by a suppression of the endowment effect as a result of the Hadza's communal society.
"We need to study this further to see which explanation holds," Apicella said. "Either way the results suggest that these isolated hunter-gatherers are more rational than the average western consumer when it comes to economic decisions."
