What Chimpanzees Can Teach Us About Economics

(By the way, the experiment described in this article--involving struggles over fruit bars and chocolate--works on three-year-old humans and management consultants, too.)

clipped from www.vanderbilt.edu In a long standing enigma of economics and psychology, humans tend to immediately value an item they’ve just received more than the maximum amount they would have paid to get it to begin with. This tendency, known as the endowment effect, is something some economists consider a fluke, but new research finds that humans aren’t the only ones exhibiting an endowment effect. A new study co-authored by Vanderbilt professor Owen Jones, who is one of the nation’s few professors of both law and biology, uncovered the first evidence that chimpanzees exhibit an endowment effect similar to people. Specifically, the study showed that chimpanzees favor items they just received more than items they normally prefer that they could get through exchange. “Our results support the conclusion that the frequent failure to exchange a less-favored food for a more-preferred food was an active choice and is similar to the endowment effect behavior seen in humans,” said Jones.