Addiction and Cue-Triggered Decision Processes

Why does mobile payment promote purchases? Revisiting the pain of paying, and understanding the implicit pleasure via selective attention

The past years have witnessed a phenomenal growth of the mobile payment market, but how mobile payment affects purchase behavior receives less attention from academics. Recent studies suggested that lower pain of paying may not fully clarify the relationship between mobile payment and increased purchases (i.e., mobile payment effect). The current research first introduced price level in Study 1 and demonstrated that the pain of paying served as an underlying mechanism only in the high-price condition rather than the low-price condition. As such, Study 2 was conducted in a low-price context to address the uncovered mechanisms. We propose a new concept of "pleasure of payment" that is defined as an implicit and consumption-related hedonic response based on the cue theory of consumption. By tracking spontaneous attention to positive attributes (i.e., benefits) of products, Study 2 demonstrated this implicit pleasure as a psychological mechanism for the mobile payment effect when the pain of paying was not at play. These findings have important implications for mobile payment in research and practice by identifying price level as a boundary condition for the role of pain of paying and understanding the positive downstream consequences of mobile payment usage on consumer psychology.

Dynamic inconsistency in great apes

When presented with the option of either an immediate benefit or a larger, later reward, we may behave impatiently by choosing instant gratification. Nonetheless, when we can make the same decision ahead of time and plan for the future, we tend to make more patient choices. Here, we explored whether great apes share this core feature of human decision-making, often referred to as dynamic inconsistency. We found that orangutans, bonobos, and gorillas tended to act impatiently and with considerable variability between individuals when choosing between an immediate reward and a larger-later reward, which is a commonly employed testing method in the field. However, with the inclusion of a front-end delay for both alternatives, their decisions became more patient and homogeneous. These results show that great apes are dynamically inconsistent. They also suggest that, when choosing between future outcomes, they are more patient than previously reported. We advocate for the inclusion of diverse time ranges in comparative research, especially considering the intertwinement of intertemporal choices and future-oriented behavior.

Beyond the smoke: Historical analysis of the revenue implications of state cigarette tax policies, 1989 to 2019

INTRODUCTION

While cigarette taxes are a vital tobacco control tool, their impact on cigarette tax revenue has been largely understudied in the extant literature. This study examines how the level of cigarette taxes affects the revenue generated from cigarettes in the United States over a thirty-year period.

METHODS

We obtained the Tax Burden Data from the Centers for Disease Control and Prevention (1989-2019). Our dependent variables were gross cigarette tax revenue and per capita gross cigarette tax revenue, and our independent variable was state tax per pack. We used two-way fixed effects to estimate the relationship between state cigarette tax revenue and cigarette taxes, adjusting for state-level sociodemographic characteristics, state-fixed effects, and time trends.

RESULTS

The study reveals that raising cigarette state tax by 10 % led to a 7.2 % to 7.5 % increase in cigarette tax revenue. We also found state and regional variation in taxes and revenue, with the Northeast region having the highest taxes per pack and tax revenues. In 2019, most states had low or moderate taxes per pack and tax revenues per capita, while a few states had high taxes per pack and tax revenues per capita.

CONCLUSIONS

Our research demonstrates the positive impact of increased cigarette taxes on state tax revenue over three decades. Not only do higher taxes aid in tobacco control, but they also enhance state revenues that can be reinvested in state initiatives. Some states could potentially optimize their tax rates.

The social value of gambling: surplus estimates by gambling types for France

We estimate the social surplus of gambling in France by adding three components: consumer surplus, producer surplus and taxation revenue. To estimate consumer surplus, we use the rational benchmark approach, which attributes a loss of welfare (i.e. a negative surplus) to problem gamblers depending on their level of excess spending compared with recreational gamblers. Using data for the year 2019 and considering only legal gambling, we find that the consumer surplus is negative for the gambling activity as a whole. When we add the producer surplus and the taxation revenue to the consumer surplus, we find that the social surplus is more likely to be negative, ranging from - 45 billion euros in the pessimistic scenario to + 6 billion euros in the optimistic scenario. There are, however, important differences between gambling types. The social surplus is negative in all scenarios for poker and sports betting. Conversely, it is positive in all scenarios for draw lotteries and scratch cards.

Computational models of behavioral addictions: State of the art and future directions

Non-pharmacological behavioral addictions, such as pathological gambling, videogaming, social networking, or internet use, are becoming major public health concerns. It is not yet clear how behavioral addictions could share many major neurobiological and behavioral characteristics with substance use disorders, despite the absence of direct pharmacological influences. A deeper understanding of the neurocognitive mechanisms of addictive behavior is needed, and computational modeling could be one promising approach to explain intricately entwined cognitive and neural dynamics. This review describes computational models of addiction based on reinforcement learning algorithms, Bayesian inference, and biophysical neural simulations. We discuss whether computational frameworks originally conceived to explain maladaptive behavior in substance use disorders can be effectively extended to non-substance-related behavioral addictions. Moreover, we introduce recent studies on behavioral addictions that exemplify the possibility of such extension and propose future directions.

Many phish in the C $\mathcal{C}$ : A coexisting-choice-criteria model of security behavior

Normative decision theory proves inadequate for modeling human responses to the social-engineering campaigns of advanced persistent threat (APT) attacks. Behavioral decision theory fares better, but still falls short of capturing social-engineering attack vectors which operate through emotions and peripheral-route persuasion. We introduce a generalized decision theory, under which any decision will be made according to one of multiple coexisting choice criteria. We denote the set of possible choice criteria by C $\mathcal {C}$ . Thus, the proposed model reduces to conventional Expected Utility theory when| C EU | = 1 $|\mathcal {C}_{\text{EU}}|=1$ , while Dual-Process (thinking fast vs. thinking slow) decision making corresponds to a model with| C DP | = 2 $|\mathcal {C}_{\text{DP}}|=2$ . We consider a more general case with| C | ≥ 2 $|\mathcal {C}|\ge 2$ , which necessitates careful consideration of how, for a particular choice-task instance, one criterion comes to prevail over others. We operationalize this with a probability distribution that is conditional upon traits of the decisionmaker as well as upon the context and the framing of choice options. Whereas existing signal detection theory (SDT) models of phishing detection commingle the different peripheral-route persuasion pathways, in the present descriptive generalization the different pathways are explicitly identified and represented. A number of implications follow immediately from this formulation, ranging from the conditional nature of security-breach risk to delineation of the prerequisites for valid tests of security training. Moreover, the model explains the "stepping-stone" penetration pattern of APT attacks, which has confounded modeling approaches based on normative rationality.

Mechanisms underlying performance in a cued go/no-go Pavlovian-to-instrumental transfer paradigm

Environmental cues that remind us of rewarding outcomes (drugs, food) play a significant role in addiction relapse. In the lab the Pavlovian-to-instrumental transfer (PIT) task has been used to formally examine how cues associated with reward or punishment can bias ongoing instrumental responding. Using a version of this paradigm that integrates PIT with a go/no-go task many studies have related stronger PIT effects (with non-drug rewards) to problematic alcohol use including risky alcohol users relative to non-risky drinkers, individuals with alcohol dependence versus healthy controls and individuals in recovery from alcohol use disorder who are more likely to relapse. However the theoretical importance of these findings and the implications for models of addiction was previously not clear. Understanding if this task indexes the general motivating effects of reward cues on instrumental responding (and whether this is sensitive to shifts in motivation for those outcomes) is critical for understanding these previous results within the context of addiction. Thus, in the current study we aimed to delineate the associative mechanisms that drive the stimulus effects observed in this PIT task. Specifically, we wished to examine whether the cueing effects observed in the cued-go/no-go task were selective in their effect on action, insofar as Pavlovian cues specifically invigorated (or suppressed) responding only if they were associated with congruent outcomes. We conclude that the PIT measured with this task is general in nature. Surprisingly however, the biasing effects of Pavlovian cues on instrumental responding did not appear to be sensitive to outcome devaluation.

The Design of the RAND Health Insurance Experiment: A Retrospective

This article, prepared as part of a special issue on multiarmed experiments, describes the design of the RAND Health Insurance Experiment, paying particular attention to the choice of arms. It also describes how the results of the Experiment were used in a simulation model and, looking back, how the design might have differed, and how the results apply today, 4 decades after the Experiment was conducted.

Does slow release oral morphine have impact on craving and impulsivity in heroin dependent individuals?

Craving and impulsivity are addiction components which explain why heroin-dependant individuals (HDI), continue using heroin despite not wanting to do so. Opioid maintenance treatment (OMT), such as slow-release oral morphine (SROM), is the most effective treatment for opioid dependence. However, the impact of SROM on craving and impulsivity remains unclear. In this observational study, 23 HDI receiving SROM, their usual OMT, took part in the experiment. Each of the participants filled in the perceived level of craving with a visual analog scale. Their impulsivity was assessed via three laboratory tasks, the stop-signal reaction time, the Balloon Analogue Risk Task and delay discounting. Each evaluation was performed before and after SROM administration. Craving was significantly reduced after administration of SROM (difference 2.83; P  = 0.0010), whereas there were no significant differences in performance in the three laboratory tasks. In the long term, we observed an improvement on delay discounting correlated with the duration and dosage of SROM. The acute impact of SROM appears to significantly reduce craving, without impacting impulsivity. Observation of the correlation between delay discounting and the duration and dosage of OMT is of great interest and should be studied further.

Revealing the Intellectual Structure and Evolution of Digital Addiction Research: An Integrated Bibliometric and Science Mapping Approach

The current study uses "digital addiction" as an umbrella term to refer to addiction to the Internet, social media, smartphones, digital devices, video games, or similar digital technologies. The study aims to investigate the scientific landscape of the digital addiction research field through combining bibliometric and science mapping analysis and to facilitate insight into the development and evolution of this knowledge base. Data for the analysis were extracted from the Scopus database, which covers a wide range of journal articles, with 429 articles addressing digital addiction included in the analysis. The science mapping analysis was performed over three consecutive time periods using SciMAT software to observe the thematic evolution. The results indicated that addictive behavior was the most significant theme across the three time periods. Cross-sectional studies addressing the risk factors or outcomes of addiction among adults and different sexes were prevalent during the first period (1997-2012), while interest moved to the addictive behavior of adolescents and students during the second period (2013-2017). Research during the third period (2018-2022) was driven by smartphone and social media addiction, and resilience as a preventive factor garnered more research interest than previously studied risk factors, which may indicate a perspective change by researchers. Implications are suggested for future investigations of digital addiction.

The Economics of Tobacco Regulation: A Comprehensive Review

Tobacco regulation has been a major component of health policy in the developed world since the UK Royal College of Physicians' and the US Surgeon General's reports in the 1960s. Such regulation, which has intensified in the past two decades, includes cigarette taxation, place-based smoking bans in areas ranging from bars and restaurants to workplaces, and regulations designed to make tobacco products less desirable. More recently, the availability of alternative products, most notably e-cigarettes, has increased dramatically, and these products are just starting to be regulated. Despite an extensive body of research on tobacco regulations, there remains substantial debate regarding their effectiveness, and ultimately, their impact on economic welfare. We provide the first comprehensive review of the state of research in the economics of tobacco regulation in two decades.

A review of mathematical modeling of addiction regarding both (neuro-) psychological processes and the social contagion perspectives

Addiction is a complex biopsychosocial phenomenon, impacted by biological predispositions, psychological processes, and the social environment. Using mathematical and computational models that allow for surrogative reasoning may be a promising avenue for gaining a deeper understanding of this complex behavior. This paper reviews and classifies a selection of formal models of addiction focusing on the intra- and inter-individual dynamics, i.e., (neuro) psychological models and social models. We find that these modeling approaches to addiction are too disjoint and argue that in order to unravel the complexities of biopsychosocial processes of addiction, models should integrate intra- and inter-individual factors.

Uncertainty and Demand for Insurance: A Theoretical Model of How Self-Control Manages the Optimal Decision-Making

With the present work, we aim to mark a beginning line on the study of decision-making of potential consumers in the insurance sector, with the long-term purpose of defining the optimal cognitive processes to be undertaken when deciding whether to purchase insurance or not. Decision-making in conditions of uncertainty is influenced by the dual-self model doers/planner integrated with the hot–cold states and prospect utility function. Thus, we present a theoretical model of choice-making to evaluate the level of optimal self-control necessary to be exerted if the individual is either in the hot or in the cold state depending on the arousal. This theoretical choice-making model lays the ground for the decision journey by following the long-term utility and avoiding gross mistakes that could lead the consumer not to insure, when the odds suggest doing it, or vice versa, in situations when it would not be necessary.

Investigating the Neural Correlates of the Affect Heuristic Using Functional Magnetic Resonance Imaging

This study investigated the neural correlates of the so-called "affect heuristic," which refers to the phenomenon whereby individuals tend to rely on affective states rather than rational deliberation of utility and probabilities during judgments of risk and utility of a given event or scenario. The study sought to explore whether there are shared regional activations during both judgments of relative risk and relative benefit of various scenarios, thus being a potential candidate of the affect heuristic. Using functional magnetic resonance imaging, we developed a novel risk perception task, based on a preexisting behavioral task assessing the affect heuristic. A whole-brain voxel-wise analysis of a sample of participants (n = 42) during the risk and benefit conditions revealed overlapping clusters in the left insula, left inferior frontal gyrus, and left medial frontal gyrus across conditions. Extraction of parameter estimates of these clusters revealed that activity of these regions during both tasks was inversely correlated with a behavioral measure assessing the inclination to use the affect heuristic. More activity in these areas during risk judgments reflect individuals' ability to disregard momentary affective impulses. The insula may be involved in integrating viscero-somatosensory information and forming a representation of the current emotional state of the body, whereas activity in the left inferior frontal gyrus and medial frontal gyrus indicates that executive processes may be involved in inhibiting the impulse of making judgments in favor of deliberate risk evaluations.

Shock and awe or incentive-compatible harm reduction? Graphic health warnings on tobacco packages

BACKGROUND

Graphic Health Warnings (GHWs) on cigarette packages were first introduced in Canada in 2001 and will become mandatory in the US as of January 2022. While previous studies have evaluated the impacts of GHWs, the data used in these studies have several shortcomings. The objective of this paper was to investigate the likely impact of such warnings in the US based upon the experience of Canada using hitherto unexplored monthly cigarette sales data, and to explore if alternative approaches involving risk-reduced products might be more successful in reducing smoking.

METHODS

We used quasi-experimental segmented regression and difference-in-differences analyses. Data on monthly sales (i.e., shipments) of cigarettes from Canadian manufacturers to Canadian retailers during 1995-2005 were obtained from Statistics Canada.

RESULTS

We found that GHWs did not have a significant impact on the sales of cigarettes in Canada. We propose an alternative type of graphical health messaging that actively combines information on how to quit with the legally required messaging. The novelty of the proposal is that it is incentive compatible for the supply side of the market and if adopted in several states, the measure could be tested by using a suitable treatment-control design.

CONCLUSIONS

Our findings imply that we should not expect any notable decline in sales or consumption as a result of implementation of GHWs in the US. The main impact of GHWs will be to add to the anti-smoking culture that has grown steadily over several decades, and this may impact smoking in the longer term.

Prosociality predicts health behaviors during the COVID-19 pandemic

Socially responsible behavior is crucial for slowing the spread of infectious diseases. However, economic and epidemiological models of disease transmission abstract from prosocial motivations as a driver of behaviors that impact the health of others. In an incentivized study, we show that a large majority of people are very reluctant to put others at risk for their personal benefit. Moreover, this experimental measure of prosociality predicts health behaviors during the COVID-19 pandemic, measured in a separate and ostensibly unrelated study with the same people. Prosocial individuals are more likely to follow physical distancing guidelines, stay home when sick, and buy face masks. We also find that prosociality measured two years before the pandemic predicts health behaviors during the pandemic. Our findings indicate that prosociality is a stable, long-term predictor of policy-relevant behaviors, suggesting that the impact of policies on a population may depend on the degree of prosociality.

Neural mechanisms of credit card spending

Credit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychological mechanisms behind this spending facilitation effect remain conjectural. A leading hypothesis is that credit cards reduce the pain of payment and so 'release the brakes' that hold expenditures in check. Alternatively, credit cards could provide a 'step on the gas,' increasing motivation to spend. Here we present the first evidence of differences in brain activation in the presence of real credit and cash purchase opportunities. In an fMRI shopping task, participants purchased items tailored to their interests, either by using a personal credit card or their own cash. Credit card purchases were associated with strong activation in the striatum, which coincided with onset of the credit card cue and was not related to product price. In contrast, reward network activation weakly predicted cash purchases, and only among relatively cheaper items. The presence of reward network activation differences highlights the potential neural impact of novel payment instruments in stimulating spending-these fundamental reward mechanisms could be exploited by new payment methods as we transition to a purely cashless society.

Model based planners reflect on their model-free propensities

Dual-reinforcement learning theory proposes behaviour is under the tutelage of a retrospective, value-caching, model-free (MF) system and a prospective-planning, model-based (MB), system. This architecture raises a question as to the degree to which, when devising a plan, a MB controller takes account of influences from its MF counterpart. We present evidence that such a sophisticated self-reflective MB planner incorporates an anticipation of the influences its own MF-proclivities exerts on the execution of its planned future actions. Using a novel bandit task, wherein subjects were periodically allowed to design their environment, we show that reward-assignments were constructed in a manner consistent with a MB system taking account of its MF propensities. Thus, in the task participants assigned higher rewards to bandits that were momentarily associated with stronger MF tendencies. Our findings have implications for a range of decision making domains that includes drug abuse, pre-commitment, and the tension between short and long-term decision horizons in economics.

Potential roles of the rodent medial prefrontal cortex in conflict resolution between multiple decision-making systems

Mammalian decision-making is mediated by the interaction of multiple, neurally and computationally separable decision systems. Having multiple systems requires a mechanism to manage conflict and converge onto the selection of singular actions. A long history of evidence has pointed to the prefrontal cortex as a central component in processing the interactions between distinct decision systems and resolving conflicts among them. In this chapter we review four theories of how that interaction might occur and identify how the medial prefrontal cortex in the rodent may be involved in each theory. We then present experimental predictions implied by the neurobiological data in the context of each theory as a starting point for future investigation of medial prefrontal cortex and decision-making.

Self-control in daily life: Prevalence and effectiveness of diverse self-control strategies

OBJECTIVE

What strategies do people use to resist desires in their day-to-day life? How effective are these strategies? Do people use different strategies for different desires? This study addresses these questions using experience sampling to examine strategy use in daily life.

METHOD

Participants (N = 197, M_age  = 20.4, 63% female) reported on their use of six specific strategies (situation modification, distraction, reminding self of goals, promise to give in later, reminder of why it is bad, willpower) to resist desires (4,462 desires reported over a week).

RESULTS

Participants reported using at least one strategy 89% of the time, and more than one strategy 25% of the time. Goal reminders and promises to give in later were more likely to be used for stronger desires. People also preferred different strategies for different types of desires (e.g., eating vs. leisure vs. work, etc.).

CONCLUSION

In contrast to recent theoretical predictions, we find that many strategies, including inhibition, are similarly effective and that using multiple strategies is especially effective.

Using quantitative trait in adults with ADHD to test predictions of dual-process theory

Dual-process theory is a widely utilized modelling tool in the behavioral sciences. It conceptualizes decision-making as an interaction between two types of cognitive processes, some of them fast and intuitive, others slow and reflective. We make a novel contribution to this literature by exploring differences between adults with clinically diagnosed ADHD and healthy controls for a wide range of behaviors. Given the clinical picture and nature of ADHD symptoms, we had a strong a priori reason to expect differences in intuitive vs reflective processing; and thus an unusually strong case for testing the predictions of dual-process theory. We found mixed results, with overall weaker effects than expected, except for risk taking, where individuals with ADHD showed increased domain sensitivity for gains vs losses. Some of our predictions were supported by the data but other patterns are more difficult to reconcile with theory. On balance, our results provide only limited empirical support for using dual-process theory to understand basic social and economic decision-making.

Technology Use: Too Much of a Good Thing?

There is growing evidence of risks associated with excessive technology use, especially among teens and young adults. However, little is known about the characteristics of those who are at elevated risk of being problematic users. Using data from the 2012 Current Population Survey Internet Use Supplement and Educational Supplement for teens and young adults, this study developed a conceptual framework for modeling technology use. A three-part categorization of use was posited for utilitarian, social and entertainment purposes, which fit observed data well in confirmatory factor analysis. Seemingly unrelated regression was used to examine the demographic characteristics associated with each of the three categories of use. Exploratory factor analysis uncovered five distinct types of users, including one user type that was hypothesized to likely be at elevated risk of problematic use. Regression results indicated that females in their twenties who are in school and have greater access to technology were most likely to fall into this higher-risk category. Young people who live with both parents were less likely to belong to this category. This study highlighted the importance of constructing models that facilitate identification of patterns of use that may characterize a subset of users at high risk of problematic use. The findings can be applied to other contexts to inform policies related to technology and society as well.

SUPPLEMENTARY INFORMATION

The online version of this article (10.1007/s11293-020-09683-1) contains supplementary material, which is available to authorized users.

Measuring Time Preferences

We review research that measures time preferences-i.e., preferences over intertemporal tradeoffs. We distinguish between studies using financial flows, which we call "money earlier or later" (MEL) decisions and studies that use time-dated consumption/effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences.

Risky drinking decisions: The influence of party music and alcohol abuse in young adult women

Music is a ubiquitous feature of young adults' social drinking environments, yet no studies have assessed whether and how it impacts risky decisions to drink alcohol. Previous research on the influence of music on risky decisions is largely based around decision tasks with monetary incentives.

METHODS

To assess the impact of music listening on risky drinking decisions, the current study used visual alcohol cues paired with hypothetical risky drinking scenarios (e.g., "You do not have a safe ride home" for alcohol). Young adult women with a history of alcohol abuse (N = 34) and casual-drinking control women (N = 29) made hypothetical decisions about whether or not to drink alcohol, or eat food (an appetitive control condition), in risky contexts while personal "party music" (music chosen by participants for "going out") and "home music" (music chosen for "staying in") played in the background. The main dependent measure - likelihood of drinking - was reported on a 4-point scale where 1 corresponded to "very unlikely", and 4 to "very likely".

RESULTS

Listening to party music while making decisions increased the likelihood of making risky decisions, regardless of alcohol abuse history, while other personal music did not. Further, party music specifically increased the likelihood of risky drinking decisions relative to risky eating decisions. As expected, those with a history of alcohol abuse made more risky drinking decisions in general, regardless of the type of music heard.

DISCUSSION

The results suggest that party music is an important feature of the drinking environment associated with increased risky decisions about drinking alcohol in young adult women, regardless of their history of alcohol abuse. The finding that music plays an important role in risky drinking decisions indicates that further investigation into the real-world drinking environments of young adults is crucial, as it will aid in the development of a more complete picture of risky drinking decisions in young adults.

The theory of Rational Addiction

The Theory of Rational Addictions, by Gary Becker & Kevin Murphy (1988), was a rational choice model that became a standard tool for economists modeling addictive behavior. The approach differs from other theories of addiction by modeling addictive behavior as the gradual implementation of a rational, forward-looking plan, where consumption at any point in time is partly motivated by the immediate payoff of consumption and partly by the effects this consumption has on the individual in the future. This makes addictive behavior a subset of rational behavior, requiring no more specific government policies or attention than any other consumption choice. Later work by economists extended the theory in different ways, allowing it to match an increasing number of consumption patterns, and searched for ways to test the forward-looking assumption in different types of market data. While the work was successful as a contribution to rational choice theory, with possible statistical applications, there are several reasons to dismiss its usefulness as an explanation of real-world addictive behavior and its ability to assess the welfare effects of addictions.

Dual Process Theories in Behavioral Economics and Neuroeconomics: a Critical Review

Despite their popularity, dual process accounts of human reasoning and decision-making have come under intense scrutiny in recent years. Cognitive scientists and philosophers alike have come to question the theoretical foundations of the ‘standard view’ of dual process theory and have challenged the validity and relevance of evidence in support of it. Moreover, attempts to modify and refine dual process theory in light of these challenges have generated additional concerns about its applicability and refutability as a scientific theory. With these concerns in mind, this paper provides a critical review of dual process theory in economics, focusing on its role as a psychological framework for decision modeling in behavioral economics and neuroeconomics. I argue that the influx of criticisms against dual process theory challenge the descriptive accuracy of dualistic decision models in economics. In fact, the case can be made that the popularity of dual process theory in economics has less to do with the empirical success of dualistic decision models, and more to do with the convenience that the dual process narrative provides economists looking to explain-away decision anomalies. This leaves behavioral economists and neuroeconomists with something of a dilemma: either they stick to their purported ambitions to give a realistic description of human decision-making and give up the narrative, or they revise and restate their scientific ambitions.

Minimum unit prices for alcohol

Minimum unit prices (MUPs) have been proposed on the grounds that they can reduce alcohol consumption of the heaviest drinkers, without significantly burdening moderate drinkers. This paper examines the case for MUPs in an optimal tax framework. Such a policy can improve welfare when two conditions are both satisfied. First, beverage quality and quantity should be substitutes. Second, there should be more distortion to consumption of cheaper alcohol than to more expensive varieties. The consequences of a MUP for the optimal corrective tax are explored with a calibrated numerical example. This example illustrates how the optimal tax rate might be higher when used in isolation, than when a MUP is also being used.

Alcohol and Self-Control: A Field Experiment in India

This paper studies alcohol consumption among low-income workers in India. In a 3-week field experiment, the majority of 229 cycle-rickshaw drivers were willing to forgo substantial monetary payments in order to set incentives for themselves to remain sober, thus exhibiting demand for commitment to sobriety. Randomly receiving sobriety incentives significantly reduced daytime drinking while leaving overall drinking unchanged. I find no evidence of higher daytime sobriety significantly changing labor supply, productivity, or earnings. In contrast, increasing sobriety raised savings by 50 percent, an effect that does not appear to be solely explained by changes in income net of alcohol expenditures.

A Neuroeconomic Theory of Mental Time Travel

We propose a theoretical model that places attention at the center of mental time travel (MTT) ability. This theory predicts that attention promotes a memory-based process that encodes memories of unexpected events, facilitates accurate recollection of information of such events during MTT, and optimizes subsequent decision-making. This process coexists with a habitual process that governs all other events and treats them equally. Our theory demonstrates that the memory-based process is useful when the environment features novel experiences that are likely to be relevant in future decision-making, hence worth remembering accurately. By contrast, the habitual process is optimal in environments that either do not change significantly, or have a small chance of being repeated in the future. This may explain why the ability to mentally travel in time has developed differently in humans than in other species. Implications are discussed in the context of decision-making.

Beyond simple tests of value: measuring addiction as a heterogeneous disease of computation-specific valuation processes

Addiction is considered to be a neurobiological disorder of learning and memory because addiction is capable of producing lasting changes in the brain. Recovering addicts chronically struggle with making poor decisions that ultimately lead to relapse, suggesting a view of addiction also as a neurobiological disorder of decision-making information processing. How the brain makes decisions depends on how decision-making processes access information stored as memories in the brain. Advancements in circuit-dissection tools and recent theories in neuroeconomics suggest that neurally dissociable valuation processes access distinct memories differently, and thus are uniquely susceptible as the brain changes during addiction. If addiction is to be considered a neurobiological disorder of memory, and thus decision-making, the heterogeneity with which information is both stored and processed must be taken into account in addiction studies. Addiction etiology can vary widely from person to person. We propose that addiction is not a single disease, nor simply a disorder of learning and memory, but rather a collection of symptoms of heterogeneous neurobiological diseases of distinct circuit-computation-specific decision-making processes.

Smoking and Mortality: New Evidence from a Long Panel

Many public health policies are rooted in findings from medical and epidemiological studies that fail to consider behavioral influences. Using nearly 50 years of data from Framingham Heart Study male participants, we evaluate the longevity consequences of different lifetime smoking patterns by jointly estimating smoking behavior and health outcomes over the life cycle, by richly including smoking and health histories, and by flexibly incorporating correlated unobserved heterogeneity. Unconditional difference-in-mean calculations that treat smoking behaviors as random indicate a 9.3 year difference in age of death between lifelong smokers and nonsmokers; our findings suggest the bias-corrected difference is 4.3 years.

We Can't Go Cold Turkey: Why Suppressing Drug Markets Endangers Society

This essay argues that policies aimed at suppressing drug use exacerbate the nation's opioid problem. It neither endorses drug use nor advocates legalizing the consumption and sale of all substances in all circumstances. Instead, it contends that trying to suppress drug markets is the wrong goal, and in the midst of an addiction crisis it can be deadly. There is no single, correct drug policy; the right approach depends crucially on the substance at issue, the patterns of use and supply, and the jurisdiction's culture, institutions, and material resources. Decriminalization is no panacea for a nation's drug problems. Nevertheless, either de jure or de facto decriminalization of personal drug possession is a necessary condition for mitigating this crisis.

Tobacco Regulation and Cost-Benefit Analysis: How Should We Value Foregone Consumer Surplus?

Recent tobacco regulations proposed by the Food and Drug Administration have raised a thorny question: how should the cost-benefit analysis accompanying such policies value foregone consumer surplus associated with regulation-induced reductions in smoking? In a model with rational and fully informed consumers, this question is straightforward. There is disagreement, however, about whether consumers are rational and fully informed, and the literature offers little practical guidance about what approach the FDA should use if they are not. In this paper, we outline the history of the FDA's recent attempts to regulate cigarettes and other tobacco products and how they have valued foregone consumer surplus in cost-benefit analyses. We advocate replacing the approach used in most of this literature, which first calculates health gains associated with regulation and then "offsets" them by some factor reflecting consumer surplus losses, with a more general behavioral public finance framework for welfare analysis. This framework applies standard tools of welfare analysis to consumer demand that may be "biased" (that is, not necessarily rational and fully informed) without requiring specific assumptions about the reason for the bias. This framework would require estimates of both biased and unbiased consumer demand; we sketch an agenda to help develop these in the context of smoking. The use of this framework would substantially reduce the confusion currently surrounding welfare analysis of tobacco regulation.

A triple test for behavioral economics models and public health policy

We propose a triple test to evaluate the usefulness of behavioral economics models for public health policy. Test 1 is whether the model provides reasonably new insights. Test 2 is on whether these have been properly applied to policy settings. Test 3 is whether they are corroborated by evidence. We exemplify by considering the cases of social interactions models, self-control models and, in relation to health message framing, prospect theory. Out of these sets of models, only a correctly applied prospect theory fully passes the tests at present. Specifically, in broad agreement with the evidence, a gain frame has positive implications for welfare encourages disease prevention activity, though this does not apply if the perceived probability of the bad health outcome is large enough. We see our tests as being useful to identify how much health policy weight policy makers should assign to specific behavioral economic models; they are also useful to verify what next steps would be most useful in further research.

Observed and Normative Discount Functions in Addiction and other Diseases

The aim of this paper is to find a suitable discount function able to describe the progression of a certain addiction or disease under treatment as a discounting process. In effect, a certain indicator related to a disease decays over time in a manner which is mathematically similar to the way in which discounting has been modeled. We analyze the discount functions observed in experiments which study addictive and other problematic behaviors as well as some alternative hyperbola-like discount functions in order to fit the patience exhibited by the subject after receiving the treatment. Additionally, it has been experimentally found that people with addiction display high rates of discount (impatience) and preference reversals (dynamic inconsistency). This excessive discounting must be correctly modeled by a suitable discount function, otherwise, it can become a trans-disease process underlying addiction and other disorders. The (generalized) exponentiated hyperbolic discount function is proposed to describe the progression of a disease with respect to the treatment, since it maintains the property of inconsistency by exhibiting a decreasing discount rate after an initial period in which the opposite occurs.

ERP Correlates of Simulated Purchase Decisions

Decision making in economic context is an everyday activity but its neuronal correlates are poorly understood. The present study aimed at investigating the electrophysiological brain activity during simulated purchase decisions of technical products for a lower or higher price relative to a mean price estimated in a pilot study. Expectedly, participants mostly decided to buy a product when it was cheap and not to buy when it was expensive. However, in some trials they made counter-conformity decisions to buy a product for a higher than the average price or not to buy it despite an attractive price. These responses took more time and the variability of the response latency was enhanced relative to conformity responses. ERPs showed enhanced conflict related fronto-central N2 during both types of counter-conformity compared to conformity decisions. A reverse pattern was found for the P3a and P3b. The response-locked P3 (r-P3) was larger and the subsequent CNV smaller for counter-conformity than conformity decisions. We assume that counter-conformity decisions elevate the response threshold (larger N2), intensify response evaluation (r-P3) and attenuate the preparation for the next trial (CNV). These effects were discussed in the framework of the functional role of the fronto-parietal cortex in economic decision making.

A Behavioral Economic Model of Alcohol Advertising and Price

This paper presents a new empirical study of the effects of televised alcohol advertising and alcohol price on alcohol consumption. A novel feature of this study is that the empirical work is guided by insights from behavioral economic theory. Unlike the theory used in most prior studies, this theory predicts that restriction on alcohol advertising on TV would be more effective in reducing consumption for individuals with high consumption levels but less effective for individuals with low consumption levels. The estimation work employs data from the National Longitudinal Survey of Youth, and the empirical model is estimated with quantile regressions. The results show that advertising has a small positive effect on consumption and that this effect is relatively larger at high consumption levels. The continuing importance of alcohol taxes is also supported. Education is employed as a proxy for self-regulation, and the results are consistent with this assumption. The key conclusion is that restrictions on alcohol advertising on TV would have a small negative effect on drinking, and this effect would be larger for heavy drinkers. Copyright © 2015 John Wiley & Sons, Ltd.

Economic Approaches to Estimating Benefits of Regulations Affecting Addictive Goods

The question of how to evaluate lost consumer surplus in benefit-cost analyses has been contentious. There are clear health benefits of regulations that curb consumption of goods with health risks, such as tobacco products and foods high in fats, calories, sugar, and sodium. Yet, if regulations cause consumers to give up goods they like, the health benefits they experience may be offset by some utility loss, which benefit-cost analyses of regulations need to take into account. This paper lays out the complications of measuring benefits of regulations aiming to curb consumption of addictive and habitual goods, rooted in the fact that consumers' observed demand for such goods may not be in line with their true preferences. Focusing on the important case of tobacco products, the paper describes four possible approaches for estimating benefits when consumers' preferences may not be aligned with their behavior, and identifies one as having the best feasibility for use in applied benefit-cost analyses in the near term.

Smoking status and subjective well-being

BACKGROUND/AIMS

A debate is currently underway about the Food and Drug Administration's (FDA's) methods for evaluating antitobacco regulation. In particular, the US government requires a cost-benefit analysis for significant new regulations, which has led the FDA to consider potential lost subjective well-being (SWB) of ex-smokers as a cost of any proposed antitobacco policy. This practice, which significantly limits regulatory capacity, is premised on the assumption that there is in fact a loss in SWB among ex-smokers.

METHODS

We analyse the relationship between SWB and smoking status using a longitudinal internet survey of over 5000 Dutch adults across 5 years. We control for socioeconomic, demographic and health characteristics, and in a contribution to the literature, we additionally control for two potential confounding personality characteristics, habitual use of external substances and sensitivity to stress. In another contribution, we estimate panel fixed effects models that additionally control for unobservable time-invariant characteristics.

RESULTS

We find strong suggestive evidence that ex-smokers do not suffer a net loss in SWB. We also find no evidence that the change in SWB of those who quit smoking under stricter tobacco control policies is different from those who quit under a more relaxed regulatory environment. Furthermore, our cross-sectional estimates suggest that the increase in SWB from quitting smoking is statistically significant and also of a meaningful magnitude.

CONCLUSIONS

In sum, we find no empirical support for the proposition that ex-smokers suffer lower net SWB compared to when they were smoking.

Can alcohol make you happy? A subjective wellbeing approach

There are surprisingly few discussions of the link between wellbeing and alcohol, and few empirical studies to underpin them. Policymakers have therefore typically considered negative wellbeing impacts while ignoring positive ones, used gross overestimates of positive impacts via a naïve 'consumer surplus' approach, or ignored wellbeing completely. We examine an alternative subjective wellbeing method for investigating alcohol and wellbeing, using fixed effects analyses of the associations between drinking and wellbeing within two different types of data. Study 1 examines wave-to-wave changes in life satisfaction and past-week alcohol consumption/alcohol problems (CAGE) from a representative cohort of people born in Britain in 1970, utilising responses at ages 30, 34 and 42 (a sample size of 29,145 observations from 10,107 individuals). Study 2 examines moment-to-moment changes in happiness and drinking from an iPhone-based data set in Britain 2010-13, which is innovative and large (2,049,120 observations from 31,302 individuals) but unrepresentative. In Study 1 we find no significant relationship between changing drinking levels and changing life satisfaction (p = 0.20), but a negative association with developing drinking problems (-0.18 points on a 0-10 scale; p = 0.003). In contrast, Study 2 shows a strong and consistent moment-to-moment relationship between happiness and drinking events (+3.88 points on a 0-100 scale; p < 0.001), although associations beyond the moment in question are smaller and more inconsistent. In conclusion, while iPhone users are happier at the moment of drinking, there are only small overspills to other moments, and among the wider population, changing drinking levels across several years are not associated with changing life satisfaction. Furthermore, drinking problems are associated with lower life satisfaction. Simple accounts of the wellbeing impacts of alcohol policies are therefore likely to be misleading. Policymakers must consider the complexity of different policy impacts on different conceptions of 'wellbeing', over different time periods, and among different types of drinkers.

Smoking bans, cigarette prices and life satisfaction

The consequences of tobacco control policies for individual welfare are difficult to assess, even more so when related consumption choices challenge people's willpower. We therefore evaluate the impact of smoking bans and cigarette prices on subjective well-being by analyzing data for 40 European countries and regions between 1990 and 2011. We exploit the staggered introduction of bans and apply an imputation strategy to study the effect of anti-smoking policies on people with different propensities to smoke. We find that higher cigarette prices reduce the life satisfaction of likely smokers. Overall, smoking bans are barely related to subjective well-being, but increase the life satisfaction of smokers who would like to quit smoking. The latter finding is consistent with cue-triggered models of addiction and the idea of bans as self-control devices.