She’ll Give You Two Cookies for One Chocolate: Children’s Intuitions About Trade

• In Event: 3-083 - “The Art of the Deal”: Children Balance Competing Concerns in Exchange Contexts

Integrative Statement

From the playground to the classroom, trading is ubiquitous in childhood, yet little is known about how children actually come to learn about and engage in trades. A simple form of trade involves exchanging items one for the other (e.g., one carrot for one cracker), but there are also more complicated forms of exchange in which an agent must incorporate additional information, such as their partner’s preferences, when deciding what to trade and how much of a resource to accept (e.g., one carrot for two crackers given a partner’s preference for carrots). To discern the development of children’s early notions of trade, we examined children’s predictions and evaluations of trades with others who do or do not have different preferences for resources they are trading.

In two studies, children predicted whether a third party (Mr. Frog) would accept or reject different trades proposed by another third party. In Study 1, 159 children 5-10 years (M=7.38, 91 female) predicted whether Mr. Frog would trade his cookies (5 total) for someone else’s chocolates (3 total). In the No-Preference condition, Mr. Frog did not indicate a preference for either cookies or chocolates. In the Preference condition, Mr. Frog indicated a preference for chocolates to cookies. Children were assigned to either condition and possible trades were either equal (e.g., 1 chocolate for 1 cookies) or unequal in favor of the third party (e.g., 1 chocolate for 2 cookies). Results revealed that, in both conditions, children predicted Mr. Frog would accept an equal trade of X cookies to X chocolates. However, children predicted that Mr. Frog would accept more unequal trades (giving up more cookies for fewer pieces of chocolate) when Mr. Frog had a preference for chocolate than when he had no preference (2.63 vs. 1.46), which was true across ages. Thus, children will incorporate others’ preference into their trading decisions and do so in a way that leverages those preferences for additional gain.

In Study 2, 80 children 5-10 years (M=7.37, 41 female) predicted whether Mr. Frog, who again preferred chocolates to cookies, would accept or reject different trades proposed by another third party. To rule out the possibility that children thought Mr. Frog would accept more unequal trades due to the third party having fewer to begin with (unequal trades in favor of the third party would rectify a perceived inequality), both Mr. Frog and the third party started with 5 resources each. Consistent with Study 1, results revealed that children predicted Mr. Frog would accept unequal trades. Thus, irrespective of whether the third party possesses equal or fewer resources, children across our age range thought Mr. Frog would accept unequal, numerically disadvantageous trades.

Taken together, results from these studies demonstrate that children as young as 5 years incorporate others’ preferences into their trading decisions and that one’s preference for a particular item (e.g., chocolates to cookies) overrides preference for engaging in equal (1:1) trades. We discuss the implications of these results for children’s understanding of fairness and exchange more broadly.

Authors

• Margaret Echelbarger, University of Chicago
  Presenting Author

• Kayla Good, University of Chicago
  Non-Presenting Author

• Alex Shaw, University of Chicago
  Non-Presenting Author