[radikal]

It’s mine, I tell you.

Mankind’s inner chimpanzee refuses to let go. This matters to everything from economics to law.

“I AM the most offensively possessive man on earth. I do something to things. Let me pick up an ashtray from a dime-store counter, pay for it and put it in my pocket—and it becomes a special kind of ashtray, unlike any on earth, because it's mine.” What was true of Wynand, one of the main characters in Ayn Rand's novel “The Fountainhead”, may be true of everyone. From basketball tickets to waterfowl-hunting rights to classic albums, once someone owns something, he places a higher value on it than he did when he acquired it—an observation first called “the endowment effect” about 28 years ago by Richard Thaler, who these days works at the University of Chicago.

The endowment effect was controversial for years. The idea that a squishy, irrational bit of human behaviour could affect the cold, clean and rational world of markets was a challenge to neoclassical economists. Their assumption had always been that individuals act to maximise their welfare (the defining characteristic of economic man, or Homo economicus). The value someone puts on something should not, therefore, depend on whether he actually owns it. But the endowment effect has been seen in hundreds of experiments, the most famous of which found that students were surprisingly reluctant to trade a coffee mug they had been given for a bar of chocolate, even though they did not prefer coffee mugs to chocolate when given a straight choice between the two.

Moreover, it is now possible to see the effect in the brain. In the June 12th edition of Neuron, Brian Knutson of Stanford University describes a brain-scanning study he carried out recently. The pattern and location of the activity he observed suggests the endowment effect works by enhancing the salience of possible loss. But that still does not explain why this sense of loss should be felt. The question is whether such behaviour is truly irrational, or just “differently” rational. That might be the case if, for instance, it was a hangover from the evolutionary past that worked then, but is no longer appropriate now.

Mug's game

The endowment effect has nothing to do with wealth (it is not as if chocolate bars and coffee mugs matter) or transaction costs (in most experiments these are zero). Not even emotional attachment, whatever that means, can really be called in as an explanation, since the effect is both instantaneous and sometimes felt even by those who buy and sell for a living. According to Pete Lunn, an economist at the Economic and Social Research Institute in Dublin, professional market traders are often reluctant to sell investments they already hold, even though they could trade them for assets they would prefer to invest in if starting from scratch.

Supposedly rational economists are affected, too. Dr Thaler, who recently had some expensive bottles of wine stolen, observes that he is “now confronted with precisely one of my own experiments: these are bottles I wasn't planning to sell and now I'm going to get a cheque from an insurance company and most of these bottles I will not buy. I'm a good enough economist to know there's a bit of an inconsistency there.”

The effect is not, however, universally observed. Whereas coffee mugs generate an endowment effect, tokens that can be exchanged for coffee mugs do not. And despite Dr Lunn's observations, other work suggests professional traders can, and do, overcome the effect. So what is going on?

Owen Jones, a professor of law and biology at Vanderbilt University, and Sarah Brosnan, a primatologist at Georgia State University, suspect the answer is that, in the evolutionary past, giving things up, even when an apparently fair exchange seemed to be on offer, was just too risky. These days, as they discuss in a paper just published in the William and Mary Law Review, there are contracts, rights and other ways of enforcing bargains. Animal societies have none of these mechanisms. As Adam Smith observed in the “Wealth of Nations”, “nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”

To put flesh on their idea, Dr Jones and Dr Brosnan have been trying to overcome Smith's observation by training chimpanzees to trade. In 2006 Keith Chen of Yale University showed that capuchin monkeys could learn to do so, and also seemed to exhibit the endowment effect. Chimps, it turns out, can manage to truck too. In the chimp study, tubes of peanut butter and frozen juice bars were used. Both treats were designed to be difficult to eat quickly. This makes it possible for animals that would otherwise consume any food they were given at the first opportunity at least to consider the idea of an exchange.

When presented with a choice, 60% of the chimps preferred peanut butter to juice. However, when they were endowed with peanut butter, 80% of them chose to keep it instead of exchanging it for juice. It was as if the peanut butter became more valuable as soon as it was possessed. And an opposite endowment effect was observed when the chimps were given juice.

Observing the endowment effect in three primate species suggests it does, indeed, have deep evolutionary roots. Better still, before they started work Dr Jones and Dr Brosnan predicted that the strength of the effect would vary with the evolutionary salience of the item in question. Lo and behold, when they tried the same experiments using bone and rope toys, no endowment effect was seen. Food is vital. Toys are not.

If the endowment effect does indeed vary according to evolutionary salience, this may make sense of the disparate results of hundreds of studies on people. But it does raise the question of what is and is not evolutionarily salient. Food and mates clearly are. Tangible goods such as mugs, as opposed to abstract goods such as vouchers for mugs, probably are too. But intangible possessions, such as shareholdings, do generate some effect, so physical presence cannot be all there is to it.

Steffen Huck, an economist at University College, London, has an alternative hypothesis that is directly to do with trade. In societies with markets, customers can go elsewhere. But in a small, tribal society there may be no alternative seller. In that case, those who were reluctant to trade might get better prices. It may thus make sense for an owner to be psychologically predisposed to hold out for a high price as soon as someone else expresses interest in one of his possessions—something Dr Huck's models predict would, indeed, be evolutionarily beneficial.

Keep on trucking

Because the endowment effect touches on so many areas, Dr Jones thinks it may be helpful for legislators to understand its evolutionary origins. That goods and rights such as pollution permits, radio spectrum and mobile-telephone licences do not inexorably flow towards the most efficient distribution worries the legal scholars charged with designing fair allocations. The effect also complicates the negotiation of contracts, as people demand more to give up standard provisions than they would have been willing to pay had they bargained anew.

Nor is the endowment effect alone in suggesting that Homo economicus is a rarer species than neoclassical taxonomists would like to believe. Other “irrational” phenomena include confirmation bias (searching for or interpreting information in a way that confirms one's preconceptions), the bandwagon effect (doing things because others do them) and framing problems (when the conclusion reached depends on the way the data are presented). All in all, the rational conclusion is that humans are irrational animals.

[softy54534]

The Theravada Buddhist's answer to the Endowment Effect is that sentient beings tend to self-identify with the things they own.

For sentient beings, the strongest self-identification they have with is their physical body, their feelings, their perceptions, their thinking and their consciousness.

These are the five things sentient beings strongly self-identify with and think they possess them.

[Peptobismol]

Pañcavaggi Sutta: Five Brethren
translated from the Pali by Thanissaro Bhikkhu

I have heard that on one occasion the Blessed One was staying at Varanasi in the Game Refuge at Isipatana. There he addressed the group of five monks:

"Form, monks, is not self. If form were the self, this form would not lend itself to dis-ease. It would be possible [to say] with regard to form, 'Let this form be thus. Let this form not be thus.' But precisely because form is not self, form lends itself to dis-ease. And it is not possible [to say] with regard to form, 'Let this form be thus. Let this form not be thus.'

"Feeling is not self...

"Perception is not self...

"[Mental] fabrications are not self...

"Consciousness is not self. If consciousness were the self, this consciousness would not lend itself to dis-ease. It would be possible [to say] with regard to consciousness, 'Let my consciousness be thus. Let my consciousness not be thus.' But precisely because consciousness is not self, consciousness lends itself to dis-ease. And it is not possible [to say] with regard to consciousness, 'Let my consciousness be thus. Let my consciousness not be thus.'

"What do you think, monks — Is form constant or inconstant?"

"Inconstant, lord."

"And is that which is inconstant easeful or stressful?"

"Stressful, lord."

"And is it fitting to regard what is inconstant, stressful, subject to change as: 'This is mine. This is my self. This is what I am'?"

"No, lord."

"...Is feeling constant or inconstant?"

"Inconstant, lord."...

"...Is perception constant or inconstant?"

"Inconstant, lord."...

"...Are fabrications constant or inconstant?"

"Inconstant, lord."...

"What do you think, monks — Is consciousness constant or inconstant?"

"Inconstant, lord."

"And is that which is inconstant easeful or stressful?"

"Stressful, lord."

"And is it fitting to regard what is inconstant, stressful, subject to change as: 'This is mine. This is my self. This is what I am'?"

"No, lord."

"Thus, monks, any form whatsoever that is past, future, or present; internal or external; blatant or subtle; common or sublime; far or near: every form is to be seen as it actually is with right discernment as: 'This is not mine. This is not my self. This is not what I am.'

"Any feeling whatsoever...

"Any perception whatsoever...

"Any fabrications whatsoever...

"Any consciousness whatsoever that is past, future, or present; internal or external; blatant or subtle; common or sublime; far or near: every consciousness is to be seen as it actually is with right discernment as: 'This is not mine. This is not my self. This is not what I am.'

"Seeing thus, the well-instructed disciple of the noble ones grows disenchanted with form, disenchanted with feeling, disenchanted with perception, disenchanted with fabrications, disenchanted with consciousness. Disenchanted, he becomes dispassionate. Through dispassion, he is fully released. With full release, there is the knowledge, 'Fully released.' He discerns that 'Birth is ended, the holy life fulfilled, the task done. There is nothing further for this world.'"

That is what the Blessed One said. Gratified, the group of five monks delighted at his words. And while this explanation was being given, the hearts of the group of five monks, through not clinging (not being sustained), were fully released from fermentation/effluents.

http://www.accesstoinsight.org/tipit....059.than.html

[Lillie_Steins]

Pañcavaggi Sutta: Five Brethren
translated from the Pali by Thanissaro Bhikkhu

I have heard that on one occasion the Blessed One was staying at Varanasi in the Game Refuge at Isipatana. There he addressed the group of five monks:

"Form, monks, is not self. If form were the self, this form would not lend itself to dis-ease. It would be possible [to say] with regard to form, 'Let this form be thus. Let this form not be thus.' But precisely because form is not self, form lends itself to dis-ease. And it is not possible [to say] with regard to form, 'Let this form be thus. Let this form not be thus.'
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.
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http://www.accesstoinsight.org/tipit....059.than.html

Hey bro, a suggestion for you. If you use the time you spent writing all these stuff to meditate in a cave instead you could have attained enlightenment and become the latest buddha!

[9mm_fan]

Hey bro, a suggestion for you. If you use the time you spent writing all these stuff to meditate in a cave instead you could have attained enlightenment and become the latest buddha!

Thank you for your concern. You don't have to worry about me. Buddha-hood is assured for me in the near future.

By the way, I just copy and paste the scripture and added some simple formatting. It is not written by me.

[Big A]

Thank you for your concern. You don't have to worry about me. Buddha-hood is assured for me in the near future.

By the way, I just copy and paste the scripture and added some simple formatting. It is not written by me.

as delusional as conq , pslam and kinana ...they also think and confirm without prove that they wil go heaven for you , you also confirm buddhahood is for you . thats why different religious nuts got alot of things in common

[S.T.D.]

as delusional as conq , pslam and kinana ...they also think and confirm without prove that they wil go heaven for you , you also confirm buddhahood is for you . thats why different religious nuts got alot of things in common

The Buddha is a nut to you anyway. LOL!

[S.T.D.]

The Buddha is a nut to you anyway. LOL!

of course hes nuts ...would you give up your relationship with your family and whole day sitting under a tree doing nothing ? and asking for food rather to work for food ?

[NeroASERCH]

like any religious nuts here ..throw a statement and disappear nothing new

[Paul Bunyan]

like any religious nuts here ..throw a statement and disappear nothing new

Because there's just no point. Just a waste of time. You believe what you want to believe and I believe what I want to believe.

This is the religious folder anyway, and not the anti-religious folder.

[brraverishhh]

Was about to say that is a very bold statement to make by him given the topic of not self. Being "self" assured that you would attain enlightenment seems to contradict the statement there is no self in the philosophy.

I thought the neoclassical economics of "rational" versus non-rational statement with endowment effects would have been a more interesting topic to discuss about the delusional economical situation of the GFC though.

as delusional as conq , pslam and kinana ...they also think and confirm without prove that they wil go heaven for you , you also confirm buddhahood is for you . thats why different religious nuts got alot of things in common

[HedgeYourBets]

Because there's just no point. Just a waste of time. You believe what you want to believe and I believe what I want to believe.

This is the religious folder anyway, and not the anti-religious folder.

no point ? waste of time ? then why reply again ?

its not about who believe in what ....its about the truth

this not a religious folder for religious nuts to gather this folder is for religious nuts to talk nonsense and for us to debunk it... and for others to read and learn or read and laugh

[radikal]

Was about to say that is a very bold statement to make by him given the topic of not self. Being "self" assured that you would attain enlightenment seems to contradict the statement there is no self in the philosophy.

I thought the neoclassical economics of "rational" versus non-rational statement with endowment effects would have been a more interesting topic to discuss about the delusional economical situation of the GFC though.

religious nuts always make bold statement that dont make sense im used to it already ..thats why i can still stay in here and debunk them without feeling any anger its just plain fun . i hope all readers here learn logic things instead of delusional stuff made by them .

[Peptobismol]

Was about to say that is a very bold statement to make by him given the topic of not self. Being "self" assured that you would attain enlightenment seems to contradict the statement there is no self in the philosophy.

Yes, that was intentionally meant to be bold. I am only one-quarter of the way towards the boldness of the Buddha.

By the way, the teaching is not a philosophy but a strategy. And the strategy is "not-self" and not "no self". The Buddha does not teach there is "no self" because it results in a belief known as 'annihilationism'.

The strategy of "not-self" is to wear down craving.

Definition of 'annihilationism' from DN 1:
"Herein, bhikkhus, a certain recluse or a brahmin asserts the following doctrine and view: 'The self, good sir, has material form; it is composed of the four primary elements and originates from father and mother. Since this self, good sir, is annihilated and destroyed with the breakup of the body and does not exist after death, at this point the self is completely annihilated.' In this way some proclaim the annihilation, destruction, and extermination of an existent being.