WILLPOWER AS A BEHAVIORAL ECONOMIC SYSTEM
Hyperbolic discounting has been well demonstrated by four experimental routes; and there is moderate evidence that it motivates impulse control by an intertemporal bargaining technique, proposed as the mechanism of willpower. There are reasons to expect that the hyperbolic form has even more profound consequences for human choice-making, by making risky empathic relationships with other people necessary for emotional reward. A model is described in which emotion is a reward-dependent behavior rather than a stimulus-bound respondent. Positive emotion is then limited by premature satiation of the appetite for it, a relentless process motivated by the impatience that is described by hyperbolic discount curves. This satiation can be restrained only by using adequately rare and unpredictable occasions as cues for emotion, arguably the motivational basis for vicarious experience. Willpower not only is helpless against the urge for premature satiation, but it exacerbates the satiation problem by making anticipation more thorough. The result is an asymmetrical contest between systematic attempts to vouchsafe satisfying events and impetuous attempts to put them at risk. Failure to recognize how hard it is to motivate the refreshment of appetite has been a fundamental weakness of the satisfaction-based "rational choice theory." Implications that the model described has for therapy will be discussed.
IDENTIFYING BEHAVIORAL MECHANISMS OF DRUG DEPENDENCE: DISCOUNTING OF DELAYED REINFORCERS AS AN EXEMPLAR
Behavioral economics examines conditions that influence the consumption of commodities and provides several concepts that may be instrumental in understanding drug dependence. One such concept of significance is that of how delayed reinforcers are discounted by drug dependent individuals. Discounting of delayed reinforcers refers to the observation that the value of a delayed reinforcer is discounted (reduced in value or considered to be worth less) compared to the value of an immediate reinforcer. This presentation examines how delay discounting may provide an explanation of both impulsivity and loss of control exhibited by the drug dependent. In so doing, I review economic models of delay discounting, the empirical literature on the discounting of delayed reinforcers by the drug dependent and the scientific literature on personality assessments of impulsivity among drug-dependent individuals. Finally, future directions for the study of discounting are discussed, including the study of loss of control and loss aversion among drug-dependent individuals, the relationship of discounting to both the behavioral economic measure of elasticity as well as to outcomes observed in clinical settings, and the relationship between impulsivity and psychological disorders other than drug dependence.
REFRAMING GAMBLING WITH BEHAVIORAL ECONOMICS
Problem gambling is on the rise as legalized gambling is introduced in more states; 20 years ago only two states in the USA allowed legalized gambling, while today all but two do so, the prevalence of pathological gambling has risen from 1% to 3% of the total United States population (2.9 to 8.5 million people) and average gambler debt is $35,185. In addition, pathological gamblers often face financial, employment, family and psychological difficulties and are more prone to income related crime. Co-morbidity of substance abuse and depressive disorders is also common among the majority of compulsive gamblers. Gambling is also an economic and consumer activity. From a behavioral economic perspective, jackpot size and probability, duration of play, size of bets, level of risk, matching/maximization and delay discounting bear heavily on the decision to gamble. This presentation discusses gambling as a consumer and economic activity and illustrates behavioral economic principles involved in gambling studies through recent experiments using computerized video poker and slot machines, and posits extensions to exploring alcohol and drug use in this context. Social and public policy implication of a behavioral economic view of gambling will also be discussed.
UNDERSTANDING CONSUMER CHOICE FROM A BEHAVIORAL ECONOMICS PERSPECTIVE
Behavioral economics has proven capable of predicting and explaining the behavior of nonhumans and of humans in relatively closed experimental and therapeutic environments. Is it equally capable of accounting for the effects of multi-causal naturalistic environments on consumer choice? Real-time consumer choices in store contexts are determined not simply by price (which readily finds analogies in experimental settings) but by promotional influences that include persuasive communications, branding, reputation, distribution strategies, and complex deals. The analysis of panel data for 80 consumers purchasing 9 products over 16-weeks shows that consumer behavior can be explained by a model that incorporates both behavioral-economic and marketing-scientific variables in order to capture the complexities of choice in the market place. Brand choice exhibits the sensitivity to price that behavioral economics predicts but is additionally subject to the influence of both utilitarian and symbolic reinforcement as marketing science indicates. Real world choice differs from experimental analogs (e.g., by exhibiting multi-brand purchasing, even on a single shopping trip), which have implications for adequacy of basic behavioral economic theories of consumer behavior. However, the proposed synthesis between economic and marketing theories promises a comprehensive explanation.
EVOLUTIONARY BEHAVIORAL ECONOMICS: FORAGING THEORY IN THE MODERN WORLD
Economics describes rules of exchange. Behavior is the mechanism of exchange for individual organisms, and foraging is the organization of behavior in exchange relationships with the environment. Foraging theory models how non-human animals acquire resources from their environment or in more common terms, how organisms exploit their niches. In behavioral ecology, foraging is treated as an extended sequence of behavior-environment transactions, where organisms make decisions about how to obtain disparate resources, such as food, nesting materials, and access to mates. Such activity involves exchanging time and somatic energy for resources, and is economic in nature. Human foraging research proceeds on the basic assumption that, like all organisms, humans transact with their environments. Early applications of foraging theory to human behavior typically involved descriptive anthropological work with technologically primitive societies and in general support its basic predictions. For modern humans, foraging pertains to a more diverse array of objectives. Beyond food and shelter, humans acquire a host of other diverse resources, such as clothing, social interaction, entertainment, and information about their environment. Despite obvious discrepancies in behavior with respect to resource acquisition in post-industrial societies, evidence suggests that theoretical accounts of such activities need not depart from ecological principles. Indeed, quantitative relationships from recent foraging research describe a diverse range of human behaviors, such as shopping for music on the Internet, searching for information, library use, and buying groceries at the supermarket. While this early group of studies appears to focus on actions that are easily amenable to a foraging analysis (searching and purchasing), foraging theory is not confined to these structural boundaries; some human behaviors, particularly those we collectively refer to as decision-making, function according to the same principles as foraging. This presentation will review mathematical models, quantitative, and qualitative work in decision making, foraging and behavioral economics to show that the same intertemporal choice relations and hyperbolic discounting are predicted by both behavioral economic and foraging models such that behavioral economics may be best understood as a derivative of the matching law, which is shown to be functionally equivalent to foraging theory.
BEHAVIORAL ECONOMICS: PAST, PRESENT AND FUTURE
This talk will describe the history and meaning of the term behavioral economics from the perspective of a behavioral psychologist, with a brief sketch of how this perspective may be contrasted with the other historical meaning of behavioral economics which is more closely tied to traditional economics, informed by psychological ideas. In this talk I will summarize the major concepts of behavioral economics, define and illustrate demand curves, elasticity of demand, and unit price, describe some of the work on choice and discuss substitution and complementarity between commodities offered for choice. I will briefly discuss utility functions, delay discounting, and income effects. I will describe some of the quantitative work done to characterize changes in elasticity across reinforcers and situations. I will use the large body of work on the behavioral economics of drug abuse to illustrate some of the key concepts. With this history of work as a background, I will then attempt to expand our thinking about behavioral economics of the individual consumer to a consideration of the interaction between consumer and supplier, what may be the nucleus of a social theory of mediated reinforcement. I will show that a complete understanding of the dynamics of individual reinforced behavior (consumer behavior) requires a functional analysis of the behavior of the reinforcing verbal community (supplier behavior). Taken this next step, behavioral economics becomes a theory of reinforcement that encompasses processes ranging from physiological regulation of consumption at the individual level to the development of public policy that governs the application of reinforces controlled by government and social institutions. Finally, I will show that by considering the additional social variable of information and communication (stimulus control), the behavioral economic theory dovetails with a broader theory of verbal behavioral - a theory of how human behavior is controlled by mediated stimulus control, distributed discrimination, and mediated reinforcement. At this level, behavioral economics relates directly with some of the most recent advances in distributed cognition and sets the stage for a collaboration between behavioral and cognitive theories of human behavior in a social context.
HUMAN POLYDRUG SELF-ADMINISTRATION: AN ECONOMIC ANALYSIS
Behavioral economic methods may be used to explore the interaction between drugs as reinforcers. These interactions occur with polydrug users as the price and availability of specific drugs change. Behavioral economic analysis of drug interactions can provide a basis for predicting the changes in drug consumption patterns that may result when the availability of one drug changes. More importantly, behavioral economic analysis can describe changes in drug demand that may occur between illicit drugs and those proposed as therapies. An acceptable therapy drug must have three essential characteristics. First, the therapy must be behaviorally efficacious in substantially reducing demand for the illicit drug. Behavioral efficacy could be evaluated as described above in terms of the effects of the therapy drug administered during medication periods on the elasticity of demand for the illicit drug during work periods. Second, the therapy drug must be behaviorally safe. The behavioral economic evaluation will indicate the dose and schedule of medication necessary to reduce drug demand. Behavioral economic and performance assessment methods can then be used to evaluate the behavioral effects of that therapy dose on performance, as well as on general motivation for other activities. An acceptable therapy should have minimal effects on performance and general motivation. Third, to insure compliance with the medication regimen, the therapy drug must be shown to be non-aversive or even mildly reinforcing. While many techniques are available for evaluating the aversive properties of a stimulus, an economical method would evaluate the properties of the medication within the context of efficacy testing. If the beneficial properties of the drug support self-administration of the medication during medication periods, then we can be reasonably assured that the medication is not aversive and that compliance with a clinical medication schedule would occur. Finally, the behavioral economic model used in these studies offers a framework for formulating a systematic, empirically based national policy for the control of drug abuse. It is possible with behavioral economic methods to model the essential economic features of the proposed policy with human subjects or non-human primates. A drug control policy can be modeled in terms of the comparative prices and resulting levels of consumption and expenditure. The probable outcomes of the policy can be tested in terms of its effects on illicit drug consumption, expenditures to obtain the illicit drug (drug seeking behavior), sensitivity to therapy interventions, (including substitute reinforcers and drugs), and sensitivity to supply-side restrictions.
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