In October 2013 research conducted at Penn school of arts and business revealed an empirical study that the endowment effect seems not present in Hunter-Gather societies.
That is a very interesting piece of news for behavioral economics. Indeed, we usually consider the endowment effect to be a paradox, a non rational behavior of agents in the market.
So if you have two lighter that only differ from their colors (let’s say white and black), you could expect to have tastes spread 50-50% between the population. Hence, if you give a lighter to a person, let him use it for a short while, then offer to exchange this lighter with the other you would expect to get a 50% rate of success (only depending if he got his favorite color at the first offer). Well, in Western societies this is not the case. People tend to preffer to retain what they already own. This is in economics terms non rational, we value something more… if we already own it.
Now the interesting research from Coren Apicella and Eduardo Azevedo show that in “isolated” hunter-gather societies, this ‘endowment bias’ doesn’t exist. Hence if you give first a black lighter, you would get around 50% success rate to exchange it with a white lighter.
Some jump on this new data to claim that Hunter-Gather people a “more” rational than Westeners. Well, let’s think about it.
In “Western” society, I learn very early as a child to double-check when offered anything. It started when my sister would offer to exchange my sweet that had orange falvour with a sweet that had lemon flavour (I prefer the latter). I accepted the offer, only to discover that the sweet she exchange what filled with paper. I learnt fast and she never had again the chance to make suche exchange again… Most of the time refusing and not even taking the time to check whether the sweet was still in the its original wrap. Is that a non-rational behavior?
Top get back to our Hunter-Gather experiment, I could envisage this “isolated” aspect as the fact that in such a society, when someone offer to exchange a good with one of yours, they is less chance that they will fool you with a much lower quality good, indeed, in a closed community you can only fool someone once… And actually it is vital for them to exchange goods. On the contrary in our ‘open door’ society (be they communist or capitalist), one could fool you (the black lighter you received in exchanged is almost empty but you couldn’t see it) and you would just never see that person again.
So I would see this as acting rationally, like considering it the learnt effect of trust-entropy, trust-entropy much be much lower in a tight community than in the Euro-zone for example.