Would You Change Your Past if You Could?
Understanding the "other endowment effect."
Posted July 2, 2021 | Reviewed by Devon Frye
There is a documented tendency many of us have to attach additional value to objects we own simply by virtue of owning them. Psychologists call it the “endowment effect.” For instance, we may want more money in order to be induced to part with an object we already possess than the amount we would pay for that same object if we didn't already own it.
Since pre-owned items are regularly bought and sold, we obviously overcome the endowment effect, but it does seem to be a real effect (though see Klass & Zeiler for criticism). There is some debate about what explains it. A tendency to be more pained by losses than pleased by gains, or loss aversion? A general preference to do nothing unless there is a strong reason to act, or what has been dubbed psychological inertia? Irrationality?
I shall say something about this debate shortly, but first, I wish to suggest that a similar pattern holds in the case of our own past experiences and choices. We may value our past simply by virtue of the fact it is ours; it is the past we have. I will call this propensity the other endowment effect.
Loving Our Past
Consider an illustration. You hesitate between two travel destinations. They are about equally good, but you pick one. Chances are that you would, in the end, be happy to have chosen just the one you chose. This may be true while it is also true that, in your own estimation, you would be just as happy had you opted for the alternative.
Again, if you find love, you may come to believe that the other person is the only one in the entire world who is right for you. That, of course, is statistically unlikely. (If there really is one person out of several billion singularly positioned to be your soul mate, you will probably never meet that person. For what are the chances?)
We are not invariably attached to the past, of course. We sometimes come to regret past choices and events and attempt to undo their effects. Fear of regret may be so strong as to lead to chronic indecisiveness. There seems to be, then, a great psychological benefit associated with what I am calling the other endowment effect: It helps us avoid regret and so indirectly, fear of regret, so that we may act.
What explains the other endowment effect?
I wish to suggest here that the psychological roots of both the endowment effect and the other endowment effect converge. In both cases, the explanation for what is ours—be it an object or an experience—has to do with our own sense of self and our own identity.
One of the explanations proposed of what generally goes by the name “endowment effect” in psychology is what some have called “psychological ownership theory.” Psychological ownership is the idea that we tend to incorporate what we think of as ours into our self-conception.
While psychological ownership theory is fairly recent, William James, in Principles of Psychology written more than a century ago, proposes something similar. He says that it is difficult to draw a line between what we call “me” and what we call “mine.” My things are a part of me. James writes:
In its widest possible sense… 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. All these things give him the same emotions. If they wax and prosper, he feels triumphant; if they dwindle and die away, he feels cast down—not necessarily in the same degree for each thing, but in much the same way for all.
Psychological ownership probably does play some role in the endowment effect or our tendency to value objects we own more than they are worth, but I suspect it plays an even bigger role in what I call the other endowment effect, our propensity to value our own past. What is a part of our past is a part of us and in virtue of that, it has worth that it might not possess otherwise.
These two tendencies may converge and reinforce each other: we may attach special significance to objects not simply because we own them, but because they serve as reminders of experiences we “own.” We may, on the flip side, disown objects because we want to disown parts of our past.
Loving the Bad Parts of the Past
There is a version of the other endowment effect that I find particularly remarkable: we may come not simply to overvalue what is good but to value what is bad.
Consider, for instance, this story of Portland resident Jesse, who was hit by a car while biking. Jesse was fit and athletic at the time of the accident, and now he walks with a cane. However, he does not regret the accident. He says in an interview that it changed him and his character, and that it did so for the better. He became more loving, more caring, and he likes the person he is now better than the person he once was. He even adopted the name “Jivana,” a Sanskrit word for “giver of life,” as that is how he sees himself now.
It seems that that is, in fact, who he has become. He met the driver who hit him, Christian, because he wanted to make sure Christian was doing well and was not devastated by guilt. (Christian had, indeed, been suffering serious PTSD symptoms ever since the accident.) Jivana says in a conversation between the two that he is certain the fault for the accident was at least 50 percent if not more on his side, and that he is sorry for his role in it. He goes so far as to say he is grateful for the accident, because his life on the whole is much more beautiful now.
I for one can relate to Jivana’s story. Though I am still quite young and otherwise very healthy, I have dealt with two life-threatening diseases, both of which could have killed me. Interestingly, I do not regret having those experiences. Moreover, I am not sure I would undo them if I could. I probably wouldn't, actually.
Why not? My best guess is that much like Jivana, I have integrated those pieces of my past into my identity. While I did not undergo anything like the personal transformation Jivana underwent, I was forced to reassess my own priorities. (Facing your own mortality may have that effect in general.) More importantly, my connection to my loved ones, who stood firmly by me, now has a new layer of depth.
Of course, I realize that if I traveled back in time to the point before those diagnoses, with all my subsequent memories erased, and I could choose what happens next, I would not choose a terrible illness, let alone two. But I am not at that point in the past. I am in the present. And from where I stand now, most of the bad consequences are behind me. What's left is more self-knowledge, a different way of valuing life, and indeed, deeper love.
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