Knowing What it's Worth: Children Flexibly Integrate Information to Infer Others' Resource Valuations

• In Event: Varieties of Value: Factors Influencing Children's Differing Forms of Regard for Objects

Abstract

How do children decide what something is worth to someone else? Our pre-registered studies (https://aspredicted.org/blind.php?x=9sg5yv; https://aspredicted.org/blind.php?x=27fg5h) test children's sensitivity regarding two cues to others' resource valuations: quantity and preference. Can young children weigh information about each cue, in line with mature economic reasoning? Although children have limited formal education in economics, they do participate in economic exchanges themselves (Echelbarger, Gelman, & Kalish, 2018), and their inferences regarding resource valuation are of increasing interest to developmentalists (Huh & Friedman, 2019). Children's intuitive theories of resource valuation may shape their economic choices as well as social judgments, such as how they assess the generosity of another person’s sharing.

One useful entry into questions surrounding resource valuation is the law of diminishing marginal utility (DMU), which has been described by economists as well as psychologists (Schley & Peters, 2014). DMU holds that as resource abundance increases, the value placed on each unit decreases. For example, a child may assign less value to one additional Skittle after acquiring many Skittles on Halloween. DMU also suggests that gains and losses are particularly meaningful to individuals with fewer resources, since they should value each resource unit highly. While prior research has speculated that children may intuitively understand this concept (Ahl & Dunham, 2020), we are not aware of clear evidence that children make resource valuations in line with DMU.

Study 1 tested whether children are sensitive to DMU and view resource quantity as a cue to one unit's value to another person. Here, 5–8-year-olds (n = 104) heard different vignettes. Each vignette involved two children who equally liked a resource type (e.g., bouncy balls), started with different quantities, and then faced gains or losses. As we hypothesized, participants made predictions in line with DMU (Figure 1). They predicted that a child with fewer resources would value an additional resource more highly than a child with greater resources. For instance, a child with two bouncy balls would try harder to recover a lost bouncy ball than a child with five bouncy balls (Recover vignette, n = 52), t(51) = 9.38, p < .001. Participants frequently referenced the quantities possessed by the children in post-test explanations for their answers (Figure 2).

Study 2 (n = 104) was identical except for new information about preferences: here, the children with fewer resources liked the resource less than the children with greater resources. Such conditions undermine the assumptions of DMU and should lead to different responses. As hypothesized, participants were less likely to predict that children with fewer resources would highly value an additional resource than in Study 1 (Figure 1). Additionally, they referenced the children's preferences in their explanations more frequently than in Study 1, chi-square (1, N = 191) = 122.77, p < .001, and mentioned quantity less frequently, p < .001.

Our results indicate the early emergence of intuitive economic theories that align with formal economic principles. Long before formal learning on this topic, children integrate quantity and preference information to sensibly predict others' resource valuations.

Authors

• Richard E Ahl, Boston College
  Presenting Author

• Emma Cook, Boston College
  Non-Presenting Author

• Paloma Garcia, Brown University
  Non-Presenting Author

• Katherine McAuliffe, Boston College
  Non-Presenting Author