Category Archives: endowment effect

Susan Gelman on children’s preference for unique owned objects

Gelman, S. A., & Davidson, N. S. (2016). Young children’s preference for unique owned objects. Cognition.

This is an incredible and profound study on children’s attachment to objects, with implications both for cognitive and emotional development. It’s also a study that amazes me for the amount of work it required from researchers (who had to find brand-new replicas of more than 100 children’s attachment objects).

The experimental design is quite simple. Researchers asked 36 three-year-olds to choose between two toys for either themselves or the researcher: an old (visibly used) toy vs. a new (more attractive) toy matched in type and appearance (e.g., old vs brand-new blanket). Focal pairs contrasted an old toy that belonged to the child with a matched new object; control pairs contrasted toys the child had never seen before.

The conclusion of the study is that, by 3 years of age, young children place special value on unique owned objects. Children prefer their original objects to newer, better versions, but only in the case of the focal pairs (with their objects of attachment) and not with the control pairs (objects the child had never seen before). These findings are consistent with the view that possessions are extensions of the self.

In addition, these preferences hold for “sleep” objects (blanket, pillow) and toys representing an animated character (dolls, action figures) but not for inanimate objects (a car, a toy hammer, etc.) Uniqueness is valued for sleep objects and animate toys, but not for inanimate toys. Moreover, in 30 out of 31 cases, attachment objects had a proper name. Ownership, attachment and anthropomorphism (eyes, animated features, soft or furry texture) all combine to enhance children’s preferences for their own objects.

In addition, children seemed to understand that their special objects had value for them only in so far as they share a history with the object. That is, they did not attribute the researcher the same preference for the old (attachement) object. In this sense, they seem to understand the subjective nature of value.

The results are remarkable, among other things, because of the understanding of the abstract ownership relationships, the distinction between appearance and reality and the perspective-taking abilities involved in children’s responses. The authors also emphasize how attuned any child can be to minor features of an object that indicate that it is her unique object and not a substitute.

These findings also offer a different (experimental, cognitive) perspective on the phenomenon of “transitional objects,” first described by Donald Winnicott in the 1950s.

A remarkable study indeed.

Children value ideas over labor

Text #15

Li, V., Shaw, A., & Olson, K. R. (2013). Ideas versus labor : What do children value in artistic creation ? COGNITION, 127(1), 38–45. doi:10.1016/j.cognition.2012.11.001

The procedure is simple: have an adult direct a child making a work of art (so that the adult is contributing the guiding ideas while the child is contributing “brute” labor). Then, reverse the roles: have the child supply the guiding idea while the adult follows directions and executes the work of art. Finally, have the child chose which final product she prefers to take home with her: the one that incorporated her effort or the one that reflects her idea?

In a second experiment, the researchers used a similar situation but now they tricked the subjects so that children believed that the drawing contained their ideas when it actually contained the adult’s idea (and vice versa, they believed that the drawing which they had actually created while being directed by an adult was the one that incorporated their ideas).

In a third experiment, they used a third person narrative to lay out a comparison between someone who contributes labor and someone who contributes ideas to the creation of an object. Who should keep the resulting product?

These studies demonstrated that by 6 years old, children value ideas over physical labor. Six year olds systematically chose pictures that contained their own ideas over pictures that contained their labor, even when they were merely tricked into believing that they had come up with the idea for a picture that they had not. Further, 6 year olds demonstrated a general appreciation of ideas – they not only valued their own ideas (Studies 1 and 2), but also privileged idea creators over laborers in a property dispute (Study 3). In contrast, 4 year olds appear to have preferred pictures that contained their specific idiosyncratic preferences. Four year olds preferred pictures containing their ideas, but also their idiosyncratic preferences in Study 1 and pictures they believed contained their labor but also their idiosyncratic preferences in Study 2. Further supporting this possibility, in Study 3 where idiosyncratic preferences could not play a role in selection, 4 year olds showed no bias for either a third-party idea creator or laborer. Six year olds, by way of contrast, sided with the idea creators in third-party case, even when they personally had no connection to the idea.

The age effect in these studies may exist because 6, but not 4 year olds, understand that ideas are valuable and can thus be owned.

In conclusion, the tendency to value ideas is present in childhood and may emerge between 4 and 6 years old. 6 year olds value ideas over labor even when making third-party judgments, favoring those who only contributed ideas as more deserving of a picture over those who only contributed labor.

Ownership, object history and endowment effect in 2 and 3 year olds – Gelman

Text #13

Gelman, S. a., Manczak, E. M., & Noles, N. S. (2012). The nonobvious basis of ownership: Preschool children trace the history and value of owned objects. Child Development, 83(5), 1732–1747. doi:10.1111/j.1467-8624.2012.01806.x

The paper presents two studies with 2 year-olds, 3 year-olds, and adults. The first study addresses the use of object history to determine ownership, while the second studies the endowment effect. The experimental design is very simple: assign objects (from certain object sets) to individuals, and then ask subjects a) which object belongs to whom, b) which object they like best.

1) Ownership is abstract… or nonobvious.

One a conceptual level, it is interesting that this paper emphasizes the fact that ownership is abstract. I have previously used that word, abstract, to refer to ownership in a recent paper of my own. But, actually, that’s not the word that Gelman et al. prefer to use when speaking of ownership; they describe it as nonobvious rather than abstract. Here’s what they say:

  • Ownership is of interest because it is a cognitive construction, not materially present in the owned object. As Snare (1972, p. 200) aptly stated, ‘‘[A] stolen apple doesn’t look any different from any other apple.’’
  • A mature concept of ownership includes an understanding that proximity, perceptual or functional features, and desirability, although potent factors, cannot by themselves determine who owns what. In other words, ownership is an invisible quality that can be traced by consideration of object history rather than by inspection of the properties of the object.

I don’t know why the talk about “nonobvious” rather than “abstract”. Abstract seems to be the common-sense word to describe invisible, relational features.

2) Object history.

In order to assess who owns what, human agents reconstruct the history of each individual object (“first I found it there, then I gave it to her, then she placed it in that red box… etc.). “Given the centrality of object history, it becomes particularly important to track where an object moves over time.”

“Experiment 1 demonstrates that 3-year-olds, like adults, construe ownership as a nonobvious property that does not reduce to outward perceptual or functional features”. “This doesn’t seem to be the case for 2-year-olds, who in certain experimental situations and with certain sets of objects do not seem to use object history in their ownership judgments.” “The present studies demonstrate that children as young as 3 years of age spontaneously attend to object history to determine ownership.”

3) Endowment effect

The authors claim that they are the first to demonstrate an endowment effect in children 2 and 3 years of age. “The present findings suggest that positive evaluation of and preference for one’s own possessions is a basic cognitive disposition, even before children have experience with conventional economic transactions.”

This is interesting. By the way, why do they say that the disposition to value one’s own stuff is “cognitive”? They call it a “cognitive disposition”. But you can make the case that such a basic way of being of humans and perhaps other species is not appropriately described as “cognitive”. We are dealing with something that is as emotional as it is cognitive. We value and defend what we are and what we have. This phenomenon (the endowment effect) might be linked even with territorial behaviors. I think there are deep existential, cultural and evolutionary motivations in this “will to possess” and to value what one has. The word “cognitive” would suggest a conceptual frame, an innate category, some “cold” rule or feature of our cognitive system. It’s not proved that that’s the best description of what’s going on here.

“Ownership confers special value on objects, across the life span. This finding extends beyond prior work in demonstrating that preference is for the particular object assigned (not just for that type of object).”

4) Endowment effect precedes object history tracking

“The most striking developmental change concerned the comparison between the two experiments. Three-year-olds and adults distinguish ownership from likability, reporting that they owned objects even when they did not like them (e.g., the participant-plain items). In contrast, 2-year-olds show no difference between the ownership task (Experiment 1) and the endowment task (Experiment 2). In other words, 2-year-olds conflate ownership with desirability, thus failing to grasp that a toy they do not like actually belongs to them.

5) Mutual exclusivity

“Participants showed a mutual exclusivity bias concerning ownership, rarely assigning an object to Zippy [a fictional character they introduced in some situations] that had already been assigned to another owner. Mutual exclusivity is a principle that young children adhere to in their word extensions (Markman, 1989; Markman, Wasow, & Hansen, 2003), and it is notable that this same principle applies outside the realm of labeling.”

One might speculate about mutual exclusivity as a common feature of ownership and language. Perhaps this is an innate rule or constraint of our cognitive system, that is applied to different domains as language and ownership? Or perhaps mutual exclusivity as a principle co-evolved with human society and the rules of ownership? There are theories that derive human’s symbolic functioning from social life, and in particular from the institution of ownership. Mutual exclusivity is essential for the institution of ownership: the very meaning of something being mine is that I, not you, control it; if something is mine it’s not yours. In order to claim something as your own, you need to put a mark on the object, or make a gesture, or use some other symbolic means, that might be at the very origin of the semiotic function in general and language in particular.