Before we discuss money, we have to discuss exchange. And before we discuss exchange, we have to discuss the idea of property. Until someone owned something, nothing could be exchanged.
One of the strongest early findings of experimental game theory is that people value things they have more than identical things they don't have. For example, a classic experiment by Daniel Kahneman, Jack Knetsch, and Richard Thaler used coffee mugs with a school logo on them. These mugs sold for $6 at the campus store. A group of students was divided randomly. Half were asked how much they would pay for a mug. The other half were given mugs, and asked how much they would sell them for. Buyers offered an average of $2.87, whereas sellers demanded an average of $7.12.
This is not an isolated result from one group of college students. The effect has been demonstrated in many controlled and real-world settings, with both humans and animals, including birds and insects. There is no doubt that it is both real and important. Among other things, it explains part of loss aversion. Losing something you have is more painful than getting something equivalent is pleasurable. This is not inconsistent with utility theory, but it requires that individuals' utility function change as they acquire or lose goods. The simple version of utility theory that says all risk is bad cannot accommodate that, but sophisticated modern utility theory has no difficulty.
Why would evolution allow ...