Tuesday, July 26, 2016

Coelho do Vale, Pieters, and Zeelenberg (2016) on "The Benefits of Behaving Badly"

Rita Coelho do Vale, Rik Pieters, and Marcel Zeelenberg, “The Benefits of Behaving Badly on Occasion: Successful Regulation by Planned Hedonic Deviations.” Journal of Consumer Psychology 26(1): 17-28, January, 2016.

• Is abstinence or some other zero-tolerance regimen the best approach to avoid succumbing to temptation? The authors argue that planned deviations from the path of righteousness are helpful in reaching long-term goals. 

• Planned lapses, as it were, can bolster one’s motivation to persist in pursuing the long-term goal; improve the emotional experience of the regimen; and, help to sustain willpower. 

• In the absence of planned deviations, any lapse might be interpreted as a failure, and result in complete rejection of the goal (due to its revealed hopelessness). Planned deviations, alternatively, are seen as prizes for progress, not as markers of failure. 

• The studies reported here concern weight loss. The first study (n about 50) takes place at a computer, and involves role-playing a diet. There are two (virtual) diets, each averaging 1500 calories per day. But one diet maintains a limit of 1500 calories day after day, while the second involves 1300 calories/day until the seventh day, when 2700 calories are available. The second part of this experiment has subjects answer questions after opening a box containing snack foods. How many ways can they think of to prevent themselves from falling into temptation? Those who simulate the intermittent diet come up with more distractions; they also feel happier. 

• The second study (n=36) involves actual 14-day diets, one of the straight-striving variety and one of the intermittent type. The subjects keep diaries, and their motivation to continue the diet is tracked. Straight-strivers tend to be more demotivated by deviations from their diet than are the intermittent dieters, and other metrics seem to favor the intermittent approach, too. Nor is there any loss in efficacy of the diet from the intermittent approach. 

• The third study is a web-based survey of university-affiliated personnel (n=64) who are striving towards some long-term goal, such as weight loss. The two conditions involve imagining either a (1) straight or (2) intermittent plan to achieve their goal. Those in the intermittent condition express higher motivation to pursue their goal.

William Shakespeare, Behavioral Economist: Composite Post

I thought it might be worthwhile to provide a guide to the slew of Shakespeare posts that have found their way to Behavioral Economics Outlines in recent days... so here goes:

WS, Behavioral Economist, Introductory Post

WS on Status-Quo Bias and Loss Aversion

WS on Loss Aversion as a Goad to Action

WS on Being Risk-Loving in the Loss Domain

WS on Present Bias and Hyperbolic Discounting

WS on Hot States and Cold States (I)

WS on Hot States and Cold States (II)

WS on Hot States and Cold States (III)

WS on Hot States and Cold States (IV)

WS on Self-Control in the Face of Temptation

WS on Our Ignorance of the Mapping Between Actions and Consequences

WS on the Hedonic Treadmill

WS on Our Inability to Predict What Will Make Us Happy

WS on Happiness and the Easterlin Paradox

WS on Cue Management

WS on the Trophy Effect, or the Endowment Effect, or Hot States and Cold States

WS on Women Who Suspect that it is in their Long-Term Interest to Play Coy, But…

WS on Delaying Consumption, or Savouring

WS on the Endowment Effect

WS on Habit Formation and Addiction

WS on Visceral Factors and Their Underestimation

WS on Fighting Visceral Factors With Visceral Factors

WS on Signaling Commitment

WS on Recognizing Ego Depletion in Ourselves and Others

WS on Choosing a Reference Point

WS on Information Avoidance

I did mention that there were a slew of Shakespeare posts, no? I hope to add to the slew in the future. The Shakespeare quotes that appear in this slew o' posts generally are drawn from Open Source Shakespeare.

Monday, July 25, 2016

Shakespeare on Choosing a Reference Point

Desiring this man's art and that man's scope,
With what I most enjoy contented least;
Yet in these thoughts myself almost despising,
Haply I think on thee, and then my state,
Like to the lark at break of day arising
From sullen earth, sings hymns at heaven's gate;
    For thy sweet love remember'd such wealth brings
    That then I scorn to change my state with kings.

 (from Sonnet XXIX)

Shakespeare on Recognizing Ego Depletion in Ourselves and Others

Duke of Cornwall       Peace, sirrah!
                                    You beastly knave, know you no reverence?
Earl of Kent                Yes, sir, but anger hath a privilege.

(King Lear, Act 2, Scene 2, Lines 1135-1138)

* * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * *

Fiery? the fiery Duke? Tell the hot Duke that-
No, but not yet! May be he is not well.
Infirmity doth still neglect all office
Whereto our health is bound. We are not ourselves
When nature, being oppress'd, commands the mind
To suffer with the body. I'll forbear;
And am fallen out with my more headier will,
To take the indispos'd and sickly fit
For the sound man.

(King Lear, Act 2, Scene 4, Lines 1381-1389)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Give me your pardon, sir. I have done you wrong;
But pardon't, as you are a gentleman.
This presence knows,
And you must needs have heard, how I am punish'd
With sore distraction. What I have done
That might your nature, honour, and exception
Roughly awake, I here proclaim was madness.
Was't Hamlet wrong'd Laertes? Never Hamlet.
If Hamlet from himself be taken away,
And when he's not himself does wrong Laertes,
Then Hamlet does it not, Hamlet denies it.
Who does it, then? His madness. If't be so,
Hamlet is of the faction that is wrong'd;
His madness is poor Hamlet's enemy.

(Hamlet, Act 5, Scene 2, Lines 3863-3876)

Shakespeare on Signaling Commitment

Tell me your counsels, I will not disclose 'em:
I have made strong proof of my constancy,
Giving myself a voluntary wound
Here, in the thigh: can I bear that with patience.
And not my husband's secrets?

(Julius Caesar, Act 2, Scene 1, Lines 926-930)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

…prove that ever I lose more blood
with love than I will get again with drinking, pick
out mine eyes with a ballad-maker's pen and hang me
up at the door of a brothel-house for the sign of
blind Cupid.

(Much Ado About Nothing, Act 1, Scene 1, Lines 224-228)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

I will not love: if 
I do, hang me; i' faith, I will not. 

(Love's Labour's Lost, Act 4, Scene 3, Lines 1326-1327)

Shakespeare on Fighting Visceral Factors With Visceral Factors

O Helicanus, strike me, honour'd sir;
Give me a gash, put me to present pain;
Lest this great sea of joys rushing upon me
O'erbear the shores of my mortality,
And drown me with their sweetness.

(Pericles, Prince of Tyre, Act 5, Scene 1, Lines 2406-2410)

Shakespeare on Visceral Factors and Their Underestimation

For every man with his affects is born,
Not by might master'd but by special grace

(Love’s Labour’s Lost, Act 1, Scene 1, lines 155-156)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

'tis all men's office to speak patience
To those that wring under the load of sorrow,
But no man's virtue nor sufficiency
To be so moral when he shall endure
The like himself.

(Much Ado About Nothing, Act 5, Scene 1, Lines 2095-2099)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

For there was never yet philosopher
That could endure the toothache patiently

(Much Ado About Nothing, Act 5, Scene 1, Lines 2103-2104)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Love is merely a madness; and, I tell you, deserves as
well a dark house and a whip as madmen do; and the reason why
they are not so punish'd and cured is that the lunacy is so
ordinary that the whippers are in love too.

(As You Like It, Act 3, Scene 2, Lines 1476-1479)

Shakespeare on Habit Formation and Addiction

How use doth breed a habit in a man!

(Two Gentlemen of Verona, Act 5, Scene 4, Line 2149; a variation of this quotation introduces  “A Theory of Rational Addiction,” by Gary S. Becker and Kevin M. Murphy, Journal of Political Economy Vol. 96, No. 4 (Aug., 1988), pp. 675-700).

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Good night- but go not to my uncle's bed.
Assume a virtue, if you have it not.
That monster, custom, who all sense doth eat
Of habits evil, is angel yet in this,
That to the use of actions fair and good
He likewise gives a frock or livery,
That aptly is put on. Refrain to-night,
And that shall lend a kind of easiness
To the next abstinence; the next more easy;
For use almost can change the stamp of nature…

(Hamlet, Act 3, Scene 4, Lines 2562-2571) 

Shakespeare on the Endowment Effect

My lord, 'tis rated
As those which sell would give: but you well know,
Things of like value differing in the owners
Are prized by their masters: believe't, dear lord,
You mend the jewel by the wearing it.

(Timon of Athens, Act 1, Scene 1, Lines 209-213)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Let Helen go:
Since the first sword was drawn about this question,
Every tithe soul, 'mongst many thousand dismes,
Hath been as dear as Helen; I mean, of ours:
If we have lost so many tenths of ours,
To guard a thing not ours nor worth to us,
Had it our name, the value of one ten,
What merit's in that reason which denies
The yielding of her up?

(Troilus and Cressida, Act 2, Scene 2, Lines 1006-1014)

Shakespeare on Delaying Consumption, or Savouring

Whom best I love I cross; to make my gift,
The more delay'd, delighted.

(Cymbeline, Act 5, Scene 4, Lines 3251-3252)

Shakespeare on Women Who Suspect that it is in their Long-Term Interest to Play Coy, But…

Thou know'st the mask of night is on my face,
Else would a maiden blush bepaint my cheek
For that which thou hast heard me speak to-night
Fain would I dwell on form, fain, fain deny
What I have spoke: but farewell compliment!

(Romeo and Juliet, Act 2, Scene 2, Lines 934-938)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

At mine unworthiness that dare not offer
What I desire to give, and much less take
What I shall die to want. But this is trifling;
And all the more it seeks to hide itself,
The bigger bulk it shows. Hence, bashful cunning!
And prompt me, plain and holy innocence!
I am your wife, if you will marry me;

(The Tempest, Act 3, Scene 1, Lines 1370-1376)

Shakespeare on the Trophy Effect, or the Endowment Effect, or Hot States and Cold States

They are both in either's powers; but this swift business
I must uneasy make, lest too light winning
Make the prize light.

(The Tempest, Act 1, Scene 2, Lines 628-630)

* * * * * * * * * * * * * * * * * * * ** * * * * * * * * * *

Yet hold I off. Women are angels, wooing:
Things won are done; joy's soul lies in the doing.
That she beloved knows nought that knows not this:
Men prize the thing ungain'd more than it is:
That she was never yet that ever knew
Love got so sweet as when desire did sue.
Therefore this maxim out of love I teach:
Achievement is command; ungain'd, beseech:
Then though my heart's content firm love doth bear,
Nothing of that shall from mine eyes appear.

(Troilous and Cressida, Act 1, Scene 2, Lines 438-447)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

…but go with speed
To some forlorn and naked hermitage,
Remote from all the pleasures of the world;
There stay until the twelve celestial signs
Have brought about the annual reckoning.
If this austere insociable life
Change not your offer made in heat of blood;
If frosts and fasts, hard lodging and thin weeds
Nip not the gaudy blossoms of your love,
But that it bear this trial and last love;
Then, at the expiration of the year,
Come challenge me, challenge me by these deserts,
And, by this virgin palm now kissing thine
I will be thine…

(Love’s Labour’s Lost, Act 5, Scene 2, Lines 2736-2749)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Since you are dear bought, I will love you dear.

(Merchant of Venice, Act 3, Scene 2, Line 1691)

Shakespeare on Cue Management

I am fain to dine and sup with water and bran; I dare not for
my head fill my belly; one fruitful meal would set me to 't.

(Fornication is a capital crime. The speaker is saying that he must avoid eating a good meal, as that might put him in a hot state, where he will become lustful, leading, perhaps, to his execution; Measure For Measure, Act 4, Scene 3, Lines 2281-2284)

Shakespeare on Happiness and the Easterlin Paradox

And happy always was it for that son
Whose father for his hoarding went to hell?
I'll leave my son my virtuous deeds behind;
And would my father had left me no more!
For all the rest is held at such a rate
As brings a thousand-fold more care to keep
Than in possession any jot of pleasure. 
(Henry VI, Part III, Act 2, Scene 2, lines 889-895)

* * ** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Who would not wish to be from wealth exempt,
Since riches point to misery and contempt?...
My dearest lord, bless'd, to be most accursed,
Rich, only to be wretched, thy great fortunes
Are made thy chief afflictions.

(Timon of Athens, Act 4, Scene 2Lines 1641-1642 and 1652-1654)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

Lord, who would live turmoiled in the court,
And may enjoy such quiet walks as these?
This small inheritance my father left me
Contenteth me, and worth a monarchy.
I seek not to wax great by others' waning,
Or gather wealth, I care not, with what envy:
Sufficeth that I have maintains my state
And sends the poor well pleased from my gate.

(Henry VI, Part II, Act 4, Scene 10, Lines 2904-2911)

Shakespeare on Our Inability to Predict What Will Make Us Happy

All things that are,
Are with more spirit chased than enjoy'd.

(Merchant of Venice, Act 2, Scene 6, Lines 921-922)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Oh cousin!
That we should things desire, which do cost us
The loss of our desire! That nought could buy
Dear love, but loss of dear love!

(The Two Noble Kinsmen, Act 5, Scene 4, Lines 109-112, by John Fletcher and William Shakespeare, The Arden Shakespeare, third edition, Lois Potter, editor, Thomas Nelson and  Sons Ltd., 1997.)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Past reason hunted, and no sooner had
Past reason hated, as a swallow'd bait
On purpose laid to make the taker mad;
Mad in pursuit and in possession so;
Had, having, and in quest to have, extreme;
A bliss in proof, and proved, a very woe;
Before, a joy proposed; behind, a dream.

(Sonnet CXXIX, Lines 6-12)

Shakespeare on the Hedonic Treadmill

And sweets grown common lose their dear delight.

(Sonnet CII, line 12) 


If all the year were playing holidays,
To sport would be as tedious as to work;
But when they seldom come, they wish'd for come, 
And nothing pleaseth but rare accidents. 

(Henry IV, Part I, Act 1, Scene 2, Lines 307-310)  

Shakespeare on Our Ignorance of the Mapping Between Actions and Consequences

Our wills and fates do so contrary run
That our devices still are overthrown;
Our thoughts are ours, their ends none of our own.

(Hamlet, Act 3, Scene 2, Lines 2103-2105)

Sunday, July 24, 2016

Shakespeare on Self-Control in the Face of Temptation

They that have power to hurt and will do none,
That do not do the thing they most do show,
Who, moving others, are themselves as stone,
Unmoved, cold, and to temptation slow:
They rightly do inherit heaven’s graces
And husband nature’s riches from expense;
They are the lords and owners of their faces,
Others but stewards of their excellence.

Shakespeare on Hot States and Cold States (III)

In Henry V, Henry explains to the leaders of the besieged French town of Harfleur that they must surrender immediately, while the English soldiers are in a cold state, because once further fighting brings on the hot state, the soldiers will be uncontrolled and cruel beyond measure:

Therefore to our best mercy give yourselves;
Or like to men proud of destruction
Defy us to our worst: for, as I am a soldier,
A name that in my thoughts becomes me best,
If I begin the battery once again,
I will not leave the half-achieved Harfleur
Till in her ashes she lie buried.
The gates of mercy shall be all shut up,
And the flesh'd soldier, rough and hard of heart,
In liberty of bloody hand shall range
With conscience wide as hell, mowing like grass
Your fresh-fair virgins and your flowering infants.
What is it then to me, if impious war,
Array'd in flames like to the prince of fiends,
Do, with his smirch'd complexion, all fell feats
Enlink'd to waste and desolation?
What is't to me, when you yourselves are cause,
If your pure maidens fall into the hand
Of hot and forcing violation?
What rein can hold licentious wickedness
When down the hill he holds his fierce career?
We may as bootless spend our vain command
Upon the enraged soldiers in their spoil
As send precepts to the leviathan
To come ashore. Therefore, you men of Harfleur,
Take pity of your town and of your people,
Whiles yet my soldiers are in my command;
Whiles yet the cool and temperate wind of grace
O'erblows the filthy and contagious clouds
Of heady murder, spoil and villany.
If not, why, in a moment look to see
The blind and bloody soldier with foul hand
Defile the locks of your shrill-shrieking daughters;
Your fathers taken by the silver beards,
And their most reverend heads dash'd to the walls,
Your naked infants spitted upon pikes,
Whiles the mad mothers with their howls confused
Do break the clouds, as did the wives of Jewry
At Herod's bloody-hunting slaughtermen.
What say you? will you yield, and this avoid,
Or, guilty in defence, be thus destroy'd?

(Henry V, Act 3, Scene 3, lines 1275-1315)

Shakespeare on Hot States and Cold States (II)

In Timon of Athens (Act 3, Scene 6), Timon assembles his non-reciprocal friends (they did not return his (excessive) generosity with the like) ostensibly for a feast. Presumably the guests arrive hungry, and pre-feast talk of meat further whets their appetites. When the dishes are uncovered, they reveal no meat, only warm water. Oh, Timon has foreseen that this is better revenge than he could muster from simply informing his non-hungry (cold state) former friends that they are no longer welcome to table!

Shakespeare on Hot States and Cold States (I)

I do believe you think what now you speak;
But what we do determine oft we break.
Purpose is but the slave to memory,
Of violent birth, but poor validity;
Which now, like fruit unripe, sticks on the tree,
But fall unshaken when they mellow be.
Most necessary 'tis that we forget
To pay ourselves what to ourselves is debt.
What to ourselves in passion we propose,
The passion ending, doth the purpose lose.
The violence of either grief or joy
Their own enactures with themselves destroy.
Where joy most revels, grief doth most lament;
Grief joys, joy grieves, on slender accident.

(Hamlet, Act 3, Scene 2, Lines 2078-2091)

Shakespeare on Present Bias and Hyperbolic Discounting

What is love? 'tis not hereafter;
Present mirth hath present laughter;
What's to come is still unsure:
In delay there lies no plenty;
Then come kiss me, sweet and twenty,
Youth's a stuff will not endure.

(Twelfth Night, Act 2, Scene 3, Lines 748-753)

Shakespeare on Being Risk-Loving in the Loss Domain

In my school-days, when I had lost one shaft, 
I shot his fellow of the self-same flight 
The self-same way with more advised watch, 
To find the other forth, and by adventuring both 
I oft found both: I urge this childhood proof, 
Because what follows is pure innocence. 
I owe you much, and, like a wilful youth, 
That which I owe is lost; but if you please 
To shoot another arrow that self way 
Which you did shoot the first, I do not doubt, 
As I will watch the aim, or to find both 
Or bring your latter hazard back again 
And thankfully rest debtor for the first.

(The Merchant of Venice, Act 1, Scene 1, Lines 147-159)

Shakespeare on Loss Aversion as a Goad to Action

Were't not a shame, that whilst you live at jar,
The fearful French, whom you late vanquished, 
Should make a start o'er seas and vanquish you?
Methinks already in this civil broil
I see them lording it in London streets,
Crying 'Villiago!' unto all they meet.
Better ten thousand base-born Cades miscarry
Than you should stoop unto a Frenchman's mercy.
To France, to France, and get what you have lost;
Spare England, for it is your native coast;
Henry hath money, you are strong and manly;
God on our side, doubt not of victory.

(History of Henry VI, Part II, Act 4, Scene 8, Lines 2799-2810)

Shakespeare on Status-Quo Bias and Loss Aversion

Who would these fardels bear,
To grunt and sweat under a weary life,
But that the dread of something after death-
The undiscover'd country, from whose bourn
No traveller returns- puzzles the will,
And makes us rather bear those ills we have
Than fly to others that we know not of? 

(Hamlet, Act 3, Scene 1, Lines 1769-1775)


Those that much covet are with gain so fond,
For what they have not, that which they possess
They scatter and unloose it from their bond,
And so, by hoping more, they have but less;
Or, gaining more, the profit of excess
Is but to surfeit, and such griefs sustain,
That they prove bankrupt in this poor-rich gain.

The aim of all is but to nurse the life
With honour, wealth, and ease, in waning age;
And in this aim there is such thwarting strife,
That one for all, or all for one we gage;
As life for honour in fell battle's rage;
Honour for wealth; and oft that wealth doth cost
The death of all, and all together lost.

So that in venturing ill we leave to be
The things we are for that which we expect;
And this ambitious foul infirmity,
In having much, torments us with defect
Of that we have: so then we do neglect
The thing we have; and, all for want of wit,
Make something nothing by augmenting it.

(The Rape of Lucrece, Lines 185-205)

William Shakespeare, Behavioral Economist

Every year when I teach Behavioral Economics & Policy, around the time of Shakespeare's birthday (April 23 is the conventional date) I provide a handout entitled, yes, William Shakespeare, Behavioral Economist. The current version is some 11 pages long, and I thought that I would reproduce that handout (and augment it) in a series of posts here on Behavioral Economics Outlines. These posts will not consist of outlines, alas; rather, they will be Shakespeare quotes, generally taken from Open Source Shakespeare. The title William Shakespeare, Behavioral Economist, pays homage to Nava Ashraf, Colin F. Camerer, and George Loewenstein, “Adam Smith, Behavioral Economist,” Journal of Economic Perspectives 19(3): 131–145, 2005.

Tuesday, July 19, 2016

Milkman, Minson, and Volpp (2014) on Temptation Bundling

Katherine L. Milkman, Julia A. Minson, and Kevin G. M. Volpp, “Holding the Hunger Games Hostage at the Gym: An Evaluation of Temptation Bundling.Management Science 60(2): 283-299, 2014.

• Frequently our willpower to engage in activities we know we should engage in – like exercise – proves wanting. Frequently our willpower to resist alluring activities – like devoting a lot of time to reading a fun novel – also proves wanting. 

• Temptation bundling to the rescue! The idea is only to engage in the tempting activity while you are investing in the desirable but oft-neglected activity: you can only read (or listen to) the compelling novel while you are exercising. 

• The potential benefits of bundling go beyond nudging you to exercise as much as you want to anyway. Rather, the bundling can add to your welfare through two further channels. First, the exercise itself becomes less onerous. Second, the consumption of the tempting good need no longer be followed by guilt attached to squandering time on trifling indulgences. 

• The analysis involves a field experiment at an almost unnamed university. The subjects are 226 university-affiliates with gym memberships who own an iPod with free memory. The subjects are randomly allocated to three treatments. In the full treatment, an addictive novel (such as The Hunger Games) is loaded onto a loaned iPod (one iPod per subject), and the iPod is stored at the relevant gym – so the full treatment group must go to the gym (and, presumably, exercise,) if they want to listen to their novel on that iPod. The intermediate treatment group receives an addictive novel on their own iPod, and is encouraged to only allow themselves to listen to the novel while exercising. The control group is encouraged to exercise and receives a $25 bookshop gift-card that could be used to acquire a tempting e-novel. 

• Each participant undergoes an intake process, with e-novels selected by the non-controls, along with 30 minutes of exercise undertaken while listening to the novel, followed by rating how enjoyable the exercise proved. Everyone agrees not to discuss the experiment with others, and off they go, for the next nine weeks. 

• The treatment conditions lead to more exercise – but only for the first seven weeks (pre-Thanksgiving). In these seven weeks, gym visits average 7.8, 6.5, and 6.1 across the conditions. 

• The full treatment works better for those who report they like the initial workout experience, and for those who are most busy. 

• A concluding outtake visit allows estimates of willingness-to-pay for one month of a novel/exercise commitment device like that provided in the full treatment. About 60% of subjects indicate a positive willingness-to-pay for the commitment. 

• Perhaps the bundled temptation could be made more alluring, such as Netflix-style subscriptions that only work when you are on an exercise machine. Will the private sector create these?

Monday, July 11, 2016

Beard and Leitzel (2016) on Compensated Live Kidney Donations

T. Randolph Beard and Jim Leitzel, “Compensated Live Kidney Donations,” 2016; a slightly earlier version, June 17, 2015, is available at http://ssrn.com/abstract=2619934. This paper builds upon Beard and Leitzel (2014).

• To what extent are problems associated with compensation for kidney donations actually problems that already exist in the current system and/or are problems stemming not from the transplant system directly but rather from the organ shortage? The argument presented here is that most problems associated with the provision of donor compensation are either problems in the uncompensated system, too (and tolerably well-addressed), or, are problems of shortage, not of compensation.

• Uncompensated organ donation decisions -- which are not exactly of the everyday variety with meaningful feedback to build upon -- might not be made in a particularly rational fashion. 

• Standard “behavioral” influences, such as risk misperceptions, loss aversion, endowment effects, and present bias, seem to push people in the direction of not being a live organ donor. 

• Safeguards (including the provision of Independent Donor Advocates) are built into the donation system to counter misinformed, rash, or imprudent (psychologically, medically, or otherwise) donations, as well as coerced donations. 

• The introduction of compensation does little in terms of introducing new problems, though it might exacerbate present bias in decisions to donate, or intensify the potential for loss aversion along the "financial expectations" axis.

• One desirable system with compensation would look like the current system, though supplemented with back-loaded compensation, both in-kind and monetary. 

• What are the likely effects of ending the kidney shortage, beyond the lives saved? Nine effects are identified: (1) a diagnosis of End-Stage Renal Disease becomes less devastating; (2) the reluctance to add patients to the transplant list dissipates; (3) the “who gets to live” question loses much of its salience; (4) patient incentives to seek out the black market evaporate; (5) the expansion of acceptability criteria for a kidney ends or is reversed; (6) one risk of donating a kidney declines, in that a donor is assured of being able to acquire one later him or herself; (7) the need for ESRD patients to plead their case for an organ is obviated; (8) family relationships become less strained by an ESRD diagnosis; (9) the incentives to take preventative measures to stave off kidney failure decline.

• So, eight of the dimensions affected by an end to the kidney shortage would alter for the better if the shortage were eliminated -- and the undesirable impact along the ninth dimension simply reflects the fact that an improvement in the treatment of a medical condition implies that the threat represented by the condition diminishes. 

Sunday, July 3, 2016

Sadoff, Samek, and Sprenger (2015) on Food-Related Time Inconsistency

Sally Sadoff, Anya Samek, and Charles Sprenger, “Dynamic Inconsistency in Food Choice: Experimental Evidence from a Food Desert.” January, 2015 [pdf].

• The authors present the results of a natural field experiment: the subjects did not know at the time that they were participating in an experiment. 

• The subjects receive $10 in a special budget each week for two weeks; they can buy ten units of food each week, as each unit costs $1. There are 20 different food items available, half of which are healthy, and half of which are unhealthy. The selected food items are delivered to the subjects’ homes. 

• At the onset, before selection or delivery, the more than 200 subjects rate how much they like the 20 food items. Then they choose their items for the first week’s delivery. 

• At the time of delivery of the ten selected items, the subjects are given a surprise presentation of four additional goods, which can be exchanged on a one-for-one basis with any of the delivered items; so, participants have an opportunity to partly change their minds. The four additional items are foods they rated highly, two healthy, two unhealthy, and include at least one item of each type that was not in the pre-arranged bundle. 

• The idea is that any exchanges made at the time of delivery are evidence of time inconsistency; the researchers focus on exchanges that alter the healthy-unhealthy mix: 21% (46 of 218) of the subjects show such an inconsistency, and 44 of those 46 move to a less healthy mix. 

• In the second week, one day before delivery, subjects are asked if they would again like the extra four items brought for a potential exchange (with their new, pre-arranged bundle). One-third of the subjects say “no thanks,” that is, they choose to commit to not being offered a future opportunity to exchange. 

• People who are dynamically consistent in week 1 are more likely (than are the dynamically inconsistent) to say "no thanks" to the offer to have the extra items available. That is, those subjects who successfully fight temptation in week 1 are those who make most intensive use of the commitment device that eliminates temptation. Further, those who prefer not to have the option to change tend to choose relatively healthy bundles in the first instance. 

• The theoretical underpinning of Sadoff et al. (2015) derives from articles by Gul and Pesendorfer, and by Fudenberg and Levine. In these models, the mere existence of a tempting good, even if it is not chosen, in a sense alters a consumer’s reference point in such a way that the value of consuming other goods is somewhat compromised by the tempting option. People in this situation, and who understand it, will want to restrict their options, even though they are eliminating options that they know they will not choose in any event. 

• In the O’Donoghue and Rabin (2003) approach (as described here), alternatively, it is only sophisticated, present-biased consumers who know that they would succumb to temptation who find it worthwhile to restrict their future options. 

• The analysis suggests that encouraging people to make their food choices well in advance of consumption might help spur the consumption of relatively healthy foods. (Note that the grocery deliveries in the experiment generally are not consumed right away, either, and hence the additional items might not be all that tempting. Gains to precommitment might be even larger in the face of more intense temptation.)