Preschoolers and the endowment effect

Area of Science:

• Developmental Psychology
• Behavioral Economics

Background:

• The endowment effect, a cognitive bias where people value items they own more highly than identical items they do not, is well-documented in adults.
• Understanding the developmental origins of such biases is crucial for comprehending economic decision-making and cognitive development.

Purpose of the Study:

• To investigate the presence of the endowment effect in preschoolers.
• To explore the relationship between the endowment effect and innate psychobiological traits in young children.

Main Methods:

• Conducted experimental trials with 141 preschool-aged children across 6 kindergartens.
• Assessed children's toy-keeping preferences in a trading scenario.
• Correlated endowment effect manifestation with psychobiological factors: emotional state, gender, handedness, and digit ratio.

Main Results:

• Preschoolers demonstrated the endowment effect, consistently choosing to keep their own toys over trading for similar ones.
• Children showed a preference for physical possession over mere ownership, similar to adults.
• A positive correlation was found between a 'quiet and calm' emotional state and the endowment effect.
• Right-handed, quiet children were more likely to exhibit the endowment effect.
• Female children were generally calmer than males, who reported higher fear levels, consistent with prior findings in teenagers.

Conclusions:

• The endowment effect emerges early in development, present in preschoolers.
• Psychobiological traits, particularly emotional disposition and gender, influence the manifestation of the endowment effect in early childhood.
• Findings suggest that the endowment effect is rooted in fundamental aspects of possession and emotional state, observable from a young age.