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Preschoolers and the endowment effect.

Sergio Da Silva1, Bruno Moreira2, Newton Da Costa1

  • 1Graduate Program in Economics, Federal University of Santa Catarina, Florianopolis, Santa Catarina, Brazil.

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|October 10, 2014
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Summary
This summary is machine-generated.

Preschoolers display the endowment effect, preferring to keep their own toys over trading them. This behavior is linked to psychobiological traits like emotional state and gender, mirroring adult tendencies.

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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.