The “endowment effect” describes an innate, yet objectively irrational value bias best described by example. Imagine you’ve just turned 35. You’ve been proud of the way you hold your liquor since your days in college, but have noticed lately that hangovers are rougher than they used to be. Oof. No big deal though, right? Why would you give up just because your body is getting older? So you keep on keeping on. You do you, man! Except… holding onto a habit turned bad points to a flaw in the way our minds work. We tend to value things we already own higher than things we don’t own; in this case, clinging to our identity as “someone who can hold their liquor” when heavy drinking no longer serves us is an example of the endowment effect.
Although the term itself is rooted in behavioral economics, the psychology of the endowment effect applies to our personal lives as well. So how does the endowment effect change our behavior, exactly?
Endowment Effect Makes Us Overvalue Familiar Habits
It’s easy to wave a hand and say, “Some people just have no willpower!” However, the flippant dismissal of complex evolutionary psychology like the endowment effect borders on intellectual laziness. This “pull yourself up by the bootstraps” mentality is a hallmark of western culture, stretching back to at least early Christianity. We like to think we are 100% in control of our behaviors (and therefore 100% responsible for them); however, studies show that biological determinism often trumps willpower when it comes to our behavioral choices.
To understand why, we need to take a closer look at neuroanatomy and our prefrontal cortex.
Prefrontal Cortex Doesn’t Abide by Willpower
Neuroanatomy has changed a lot over the course of human evolution. Our prefrontal cortex dictates our higher decision-making processes (such as planning for future behaviors). According to a study on prefrontal cortex evolution:
The prefrontal cortex is commonly associated with cognitive capacities related to human uniqueness: purposeful actions towards higher-level goals, complex social information processing, introspection, and language. Comparative investigations of the prefrontal cortex may thus shed more light on the neural underpinnings of what makes us human.
Simply put, the prefrontal cortex is responsible for why we make certain choices. Its complex electrical synapses are wired to create certain mental shortcuts that allow us to focus on more important survival behaviors. The endowment effect taps into our inner squirrels; after all, protecting our possessions and familiar habits means we’re more prepared for winter, right? Or in this case, more prepared for all the complicated life choices we have to make on a daily basis. So the endowment effect lends itself to being a smart move for, say, hunter gatherers. But not so much for, say, the modern 35 year old reticent to let go of a toxic habit.
Wet Brain & Neurotoxicity
It’s bad enough that neuroanatomy naturally lends itself to the endowment effect without us realizing it. But when the endowment of choice is chemical in nature, a whole new host of problems crop up.
It’s widely accepted that alcohol damages brain cells. Damage to neuroanatomy can wildly alter our behaviors. Traumatic brain injuries show just how severely we rely on normal brain function. So it’s no surprise that chemical substance abuse can alter the way our prefrontal cortex behaves as well. In some cases, personality changes are so severe that our loved ones become strangers in their addiction. Getting their drug of choice becomes paramount. Family and friends take a backseat to the endowment effect. In many cases, it can get really bad.
Disavowing Toxic Endowments
Willpower only goes so far. Inner resolutions are rarely enough to deconstruct toxic habits, especially when addictive substances are at play. One of the most effective ways to beat brain chemistry is therapy. Whether that takes the form of individual or group therapy with a licensed psychologist, or more organic adventure or music therapy, seeking help is an excellent step toward disavowing bad habits. If you or a loved one is seeking help for an addiction, contact one of our addiction counselors today for a free and 100% confidential assessment: 855-737-7363