Hayley has finished making a beautiful butterfly with a cookie cutter, which she pressed into the lump of Play-Doh that she just took from Pat.

“So whose Play-Doh did you use?” Pat asks.
“Yours,” Hayley replies.
“And whose butterfly is that?” Pat says.
“Mine,” answers Hayley confidently.

In a court of law, a jury would be disinclined to agree with Hayley. Most adults would think that the original owner of the material, Pat, has some rightful possession despite Hayley’s creative input.

In this case, Hayley is a typical three-year-old whom we invited into our laboratory in Bristol, England, and Pat—my graduate student, Patricia Kanngiesser—is investigating children’s developing attitudes toward ownership. Our studies entail structured scenarios in which materials are borrowed, exchanged and sold. These experiments are part of a rapidly expanding area known as behavioral economics, which is unraveling the cognitive processes that lead humans to make decisions about ownership and transactions. Our research may involve children and Play-Doh, but ownership is at the heart of some of the most acrimonious disputes in the history of humankind.

So far researchers have found that the concept of owning things develops very early, especially for those objects that children use for comfort and grow attached to. Over the course of our lives, we increasingly use objects to express our self-identity. What is more, simply choosing an object endows it with more worth, in our mind, than an identical object we did not select. This partiality is apparently rooted in brain mechanisms that evaluate potential losses and gains in terms of their emotional significance. At least in Western cultures, humans treat objects as extensions of themselves, explaining why some of us seem to overreact to the loss of, or damage to, our personal possessions.

Charter Chattels
Our predilection for object ownership may be a uniquely human trait. We are the only species that both makes and covets possessions. Other primates may fashion rudimentary tools for cracking nuts or prodding termite hills, but these artifacts are often discarded after they have served their temporary function. Some animals, notably a number of different bird species, collect objects or even steal them, although it is doubtful they could understand or respect ownership rights. Magpies are famously known to have an eye for shiny things. Australia’s peculiar male bowerbird collects and assembles objects into an elaborate display as part of a courtship ritual to attract females. This birdbrained collecting reflects relatively instinctual behavioral patterns. In contrast, throughout civilization humans have contemplated, produced, collected, exchanged, valued and even revered objects for their own sake.

One of the earliest examples is a block of ochre engraved with crosses found in the Western Cape of South Africa. Most likely a piece of art or possibly a sacred object, this relic indicates that for at least 70,000 years humans have been making and treasuring objects for their aesthetic value. Art objects appearing later in this Upper Pleistocene epoch are more elaborate and labor-intensive, which suggests that early humans invested considerable time and effort in creating these artifacts as opposed to focusing on, say, foraging or hunting.

Today manufacturing technologies have all but replaced the need for us to make our own things. Although we are said to be living in the age of disposables, we still retain a need for ownership. The most conspicuous examples of this desire are the emotional attachments we forge with sentimental objects that extend far beyond their functional use or market value. The phenomenon appears early in development—about 60 percent of Western children become inseparable from objects such as stuffed toys or blankets. Linus from the cartoon strip Peanuts dragged his blanket wherever he went. Any parent of a child with an attachment object can attest to the importance such rags and raggedy stuffed toys have—especially when they are lost. These anointed items are considered unique and irreplaceable: children refuse to swap them for identical copies or newer versions, and bonding with more than one item is rare.

Object attachment early in life probably stems from the Western practice of separating infants for sleep. Infants find blankets or stuffed animals left in the crib and use them to soothe themselves. Consistent with this theory, biopsychologist Mieko Hobara of the New York State Psychiatric Institute reported in 2003 that attachment objects are much less prevalent in Japan, where infants sleep with their mothers into middle childhood. (The researchers found that only 38 percent of the Japanese children they tested had these items.)

Extreme fondness for specific objects increases between the ages of one and three, plateaus between three and four, then drops around age six. Yet many individuals retain these sentimental items into adulthood. An eminent neuroscientist on the editorial board of this magazine famously travels everywhere with his dilapidated Steiff teddy bear, indicating that attachment is not the preserve of the weak-minded.

Furthermore, the trauma we experience from the loss of these sentimental possessions has a common physiological basis. In a study published in 2010 my colleagues and I asked 31 adults to cut up photographs of their childhood sentimental objects. We found that this process elicited significant anxiety as measured through subtle changes in the electrical conductance of the skin. Asking the participants to destroy photographs of their valuable objects such as cell phones with no sentimental attachment to them, in contrast, produced far less of a response.

We Are What We Own
Objects can elicit possessiveness for reasons other than comfort. Young children fight over toys and other items to establish self-identity and dominance over others. In nurseries across the country the shrill cries of “mine!” are followed by tears and feeble attempts by adults to persuade children clutching at objects that “sharing is good.”

American psychologist William James was one of the first to appreciate that the things we own serve an important function as markers for self-identity. In 1890 James wrote in his Principles of Psychology, ‘‘A man’s Self is the sum total of all that he CAN call his, not only his body and his psychic powers, but his clothes and his house, his wife and children, his ancestors and friends, his reputation and works, his lands and horses, and yacht and bank-account.”

Because our belongings define part of who we are, institutions such as prisons remove them deliberately to eradicate the sense of self. Some of the most harrowing images from the Nazi concentration camps are the piles of personal possessions and luggage that were taken away from the victims in an attempt to remove their identity. These objects are now regarded as sacred. In 2005 Michel Levi-Leleu, a 66-year-old retired engineer, took his daughter to an exhibition in Paris about the Holocaust on loan from the Auschwitz-Birkenau State Museum. In the collection he spotted his long-lost father’s cardboard suitcase with his initials and address. Levi-Leleu demanded its return, which led to a legal battle with the museum. Four years later the parties settled, agreeing that the suitcase would be loaned to the Paris exhibition on a long-term basis.

In addition to contributing to our sentimental sense of self, possessions can also serve as an expression of personal preferences. That is, individuals choose to buy products they believe reflect qualities they would like to be associated with—a pattern that modern advertisers have been exploiting for years. Advertisers understand that consumers identify with brands; the more a brand signals success, the more people want it. Rolex watches, iPods and Nikes are just some of the branded objects for which people have lost their lives while defending themselves from thieves.

Professor of marketing Russell W. Belk of York University in Canada calls this materialist perspective the “extended self.” We are what we own, and when these possessions are violated through theft, loss or damage, we experience such an event as a personal tragedy.

Only recently, I had this happen to me. I do not consider myself particularly car-proud, but when someone deliberately scratched the paintwork on my VW Golf a couple of months back, I felt very upset—as if the crime had been intentionally perpetrated against me. Despite knowing the act was random, I felt enraged. Ruthless killers and drug dealers may have a special appreciation for the importance of possessions. Vince, the hit man from the modern classic movie Pulp Fiction, complains to Lance, his dealer, after discovering that his Chevy Malibu has been keyed:

Vince:“I had it in storage for three years. It was out five days, and some d**kless piece of sh*t f**ked with it.”

Lance:“They should be f**king killed, man. No trial. No jury. Straight to execution.”

Of course, I would not go as far, but when someone violates your personal property, the act is certain to stir deep emotions.

The Endowment Effect
Even ephemeral ties to objects can affect our choices. In what is now regarded as a classic study in behavioral economics from 1991, Nobel Prize–winning psychologist Daniel Kahneman of Princeton University and his colleagues handed out $6 college coffee mugs to a sample of Cornell undergraduates and then allowed them to trade with their classmates. The students swapped roles as buyers and sellers over several trades, and the researchers compared the offers with the selling prices for the mugs. To its surprise, Kahneman’s team found that very little trading occurred. The reason became apparent in the discrepancy between the prices and offers for the mugs: the students placed much greater value on the mugs in their possession than on other people’s identical mugs, pushing the selling prices up and the offer prices down. This bias, known as the endowment effect, has been replicated many times with items ranging from bottles of wine to chocolate bars.

Just the prospect of eventually owning something—you are bidding for an item in an auction, say—makes you value it more, especially if you have had a chance to handle the item before buying it. In 2008 psychologist James Wolf of Illinois State University and his colleagues at Ohio State University staged a mock auction—again, of coffee mugs—with 84 students. Half the participants handled the mugs for 10 seconds before the sale, whereas the others held them for three times as long. The researchers found that the average winning bid of the students in the 30-second examination group was significantly higher ($5.80) than was the average bid from the 10-second group ($3.70), suggesting a stronger endowment effect for those who had more contact with a mug.

The scientists then repeated the experiment with another 60 students to check whether the heightened arousal induced by the live competition could be responsible for the higher valuations of the longer-held objects. They used a sealed bid procedure, in which the top offer is placed in a closed envelope, and found that the average offer from the longer examiners ($3.07) was still significantly higher than that from the students who held the objects for less time ($2.24). (The somewhat depressed bids indicate, however, that the live scenario has some effect.) The researchers also found that the more time an individual held the highest bidder position in an online auction—boosting the buyer’s hope of future ownership—the more that person paid relative to what he or she had originally intended to wager, a behavior known as auction fever.

A commonly accepted explanation for the endowment effect is that it reflects something called loss aversion. According to this theory, put forth by Kahneman and his co-workers, people consider a loss as more significant than an equivalent gain; in other words, we fear losses more than we welcome gains [see “When Words Decide,” by Barry Schwartz; Scientific American Mind, August/September 2007].

Neuroscientist Brian Knutson of Stanford University and his colleagues have discovered patterns of neural activity consistent with the idea that our emotional reactions to potential losses and gains fuel the endowment effect. In a 2008 study his team used functional MRI to reveal increased activation of the nucleus accumbens, a region of the brain’s reward circuitry, when people look at products they like, irrespective of whether they are buying or selling those products. When we think we can buy an item at a bargain price, the medial prefrontal cortex, another part of the reward system, is also activated—but not if the price is too high. But when subjects are told to sell a desired product at a lower price than they had expected, the insula in the right hemisphere becomes active. The activation of this region signals discrepancy between anticipated goals and outcomes and could be regarded as the neural correlate of disappointment. Moreover, the greater the activity in the right insula, the more pronounced the endowment effect—that is, the more a participant overvalued the possession he or she was asked to sell.

These imaging findings provide a biological signature for loss aversion by showing that a discrepancy between perceived value and the offered sale price produces a negative emotional response. It is not simply that we have a bias toward items we own, but we also feel bad about selling one of those items for a price below what we believe it is worth.

Monkey Business
The endowment effect has been observed in children as young as six years old, suggesting that it may be basic to human cognition. The effect is not uniquely human, however, because other primates display it as well. In a study published in 2007 primatologist Sarah Brosnan, then at Emory University, and her colleagues coached chimpanzees to exchange their food and “toys,” such as bits of knotted rope, for other items. The researchers found that the primates were reluctant to trade their food for new edible items but traded toys freely. Ordinarily when the animals were given a choice of edibles, they did not show a preference for these particular foods, suggesting that the chimps attach greater value to food items once they “own” them.

Yale University psychologist Venkat Lakshminaryanan and his colleagues sought to examine whether other species that had been trained to buy and sell food would display similar behavior. As the researchers reported in 2008, they trained capuchins—the “organ grinder” breed of monkey that often appears in movies such as Night at the Museum—to trade tokens for food. The Yale scientists even provided the animals with little wallets in which to keep their money. The capuchins readily learned to trade with the experimenters who gave them the best deals, showing that they have good economic sense. Soon it became clear how much each monkey was willing to pay for different foods. When the monkeys were given food to trade, they, like humans, expected a higher sale price than they were prepared to pay for the same food.

Just this year Kanngiesser in my lab reported that several species of great ape, including gorillas and orangutans, exhibit the endowment effect. Kanngiesser’s work also confirms a key difference between humans and other primates, one that Brosnan’s chimp study hinted at: monkeys and apes exhibit the endowment effect only when it comes to food; they do not display it with other items, not even with tools that could be used to retrieve food (which have more intrinsic value than Brosnan’s “toys” did). So far only humans show endowment for objects.

Cultivating Ownership
In spite of 30 years of research on the endowment effect, investigators have only recently started to look at the phenomenon in populations other than North American students. Other cultures, it turns out, have different attitudes toward object ownership than ours does. For example, in 1988 marketing expert Melanie Wallendorf and anthropologist Eric Arnould of the University of Arizona compared southwestern Americans with Nigerian villagers and discovered that the villagers value gifts from others more and exhibit less of an endowment effect for their possessions. The finding is consistent with the prevailing view that the Nigerian villagers are less focused on individual belongings and more on culturally meaningful objects that are frequently exchanged and shared within the community.

In a study published last year psychologist William W. Maddux, now at INSEAD in Paris, and his colleagues established that the endowment effect was also not as strong in East Asian college students as it was in Western ones. The researchers reasoned that Western culture, which is more individualistic, may produce a stronger attachment to objects as an extension of the self. In a clever twist, Maddux’s team also asked the 116 students in the study to write either about their relationships with other people or about themselves, a task that can realign an individual’s focus. When East Asians concentrated on themselves, they endowed things they owned with greater value; Westerners instructed to write about others showed a reduced endowment effect. The way society regards the self—whether attention centers on a person as an individual or as a member of a group—appears to influence people’s attitude toward possessions.

In my lab, we are investigating when children begin to develop those attitudes toward ownership. Last year, for example, we found that when it comes to deciding who owns an object, even very young children appreciate the labor that goes into making the item, but preschoolers rarely consider who owned the materials in the first place, which is something that adults factor in. Children also see ownership as limited to their own possessions, whereas adults respect the belongings of others. We now are trying to clarify exactly when in childhood the more mature understanding of ownership develops.

Getting a sense of the timing of these transitions may bring us closer to the origins of our conventions about who owns what. These ties may be culturally influenced, but they appear to build on a deep-seated human need to own things. This need, which may have arisen from a primitive tendency to covet food, is a crucial psychological process that shapes the way we view ourselves and others.