Problem 3 - A matter of Choice Flashcards
Habituation (food example asian vs Italian)
eating one type of food reduces your preference for this food
Dishabituation (food example asian vs Italian)
not eating the other type of food increases your preference for it
three principles on how choices are made
- preferences are dynamic
- given a series of choices, there is more than one way to frame the possible options
- local approach
- global approach - individuals always choose the better option
- local choice
- global choice
preferences are dynamic
1. principle on how choice is made
- choices and values are mutually dependent
- choice and value interact dynamically
local approach
2. principle on how choice is made
chose between available items one at a time
global approach (2.principle on how choice is made
deciding between sequences composed of Chinese & Italian meals
local choice
3. principle on how choice is made
best option is item that has currently higher value
–> e.g. value of drug would always be chosen over non drug activity
global choice (3. principle on how choice is made)
best option is collection or sequence of items that has higher value
–> e.g. would lead to abstinence = drug was never chosen
Local equilibrium
Choosing the behaviour that gives you the most reward at the moment
“I think I would like to eat Chinese food tonight, its almost my favourite”
- current values of the two meals are the same
- overall preference for Chinese food
- how people actually make choices
–> SUBOPTIMAL = hypothetical dinner ate too often Chinese food (overconsumption)
Global equilibrium
“I find that dining out is more pleasurable when I don’t always go to my favourite restaurant. I save it for when I really want a great meal”
- the point at which the curve shows the value of each possible meal plan attains its maximum value
- overall preference for Italian food
how economists say choices should be made
–> OPTIMAL choice (economist view)
‘matching law’/melioration
over remarkably wide range of conditions, people make choices as predicted by the local equilibrium
Traditional Economic Theory
assumes people behave ‘rationally’
–> seek info on quality, cost, options & properly use this to maximise utility
Limitations of Traditional Economic Theory
- assumes that people are NOT influenced by advertisements
- -> bc they already know what makes them best off
- bounded rationality: people actually face cognitive limitations –> use shortcuts and heuristics, rather than classic utility-maximising behaviour
- traditional economics does not address the decision-making process
– > this theory often poor art explaining behaviour
Behavioural Economic Theory
- acknowledges that people oftentimes do NOT act rationally (in economic sense)
- make myopic (kurzsichtig) decisions
- do not necessarily learn form mistakes
Background of Behavioural Economic Theory
Prospect Theory (Kahnemann & Tversky):
Nudging
Prospect Theory
theory of individual economic risk taking behaviour
- ppl risk averse with regard of prospective gains
- risk seeking in face of large losses
Nudging
People should be given choices (libertarian idea), but should be guided by experts (paternalistic idea)
- ppl often do NOT make decisions in their best interest
- so need to be nudged towards better decisions
Endownment effect
when person comes into possession of something, he/she feels ownership toward it & thereby overvalues the item
Status quo bias
preference for the current state of affairs
Loss aversion
heightened tendency to focus on avoiding losses, even if it entails to engage in risky behaviour (framing is important)
overly discounting the future
e.g. in case of smoking, exaggerating pleasure (overweighting the present) & underestimating future (health) costs
decision fatigue
phenomenon of ego depletion
Behavioural Economics in intervention of Tabasco use
- encouraging people to sign contracts to quit smoking & prove rewards if they do so
- encourage use of electronic cigarettes
–> behavioural idea= easier to get people to engage in related behaviour than to eliminate habit completely
Behavioural Economics in intervention for obesity
School Cafeterieas
- fruits rather than sweets and fatty snacks near cashier
- salad bars
- giving choice of veggies
- close ice cream freezer
- sweets have to be paid cash instead of using lunch card
Principles of Behavioural Economics
- Demand
- Discounting
Demand
the amount of commodity (Ware) purchased at a given price
- it is described on basis of elasticity of demand
- demands can be graphed via demand curve (shows consumption as function of price)
- unit price
elasticity of demand
proportional change in consumption relative to proportional change in price
- inelastic
- elastic
inelastic
elasticity of demand
consumption rel. insensitive to a price change (e.g. food)
elastic
elasticity of demand
consumption relative sensitive to a price change (e.g. drug)
unit price
demand analysis quantifies the effect of price on consumption
reinforcer interaction
demand is important for the choices that drug-dependent people will make to obtain the reinforcer
- reinforcers can be substitutes (e.g. butter &margerine)
- complements (e.g. soup & soup crackers)
- can be independent (e.g. soup & butter)
opportunity costs
refers to situations where options are mutually exclusive
e.g. choosing one master’s program renders other choices unavailable
Discounting
determines how much value a reinforcer loses as a function of a manipulated variable
- delay
- probability
- social distance
delay (temporal) discounting
examines the extent to which the value of a reinforcer decreases as a function of its temporal distance
- e.g. getting 100 euros now va after 1 month delay
exponential discounting
if a larger-later reward is preferred when both, it and smaller-sooner reward, are distant in the future
- e.g. far in the future but option 50 euros still sooner vs larger 100 euros
probability discounting
determines the degree to which uncertainty of a reinforcer decreases the value of that reward
- e.g. delayed + uncertain reward (health)
vs immediate and certain reward (drug)
social discounting
determines the degree to which a person’s valuation of a reinforcer delivered to another person (family, stranger) decreases a function of the social distance between those individuals
–> e.g. close individual (family, friend) vs distal individual (stranger)
law of demand
consumption of most commodities (Waren), including psychoactive substances, is inversely related to price or response requirement
contingency management (CM) (intervention)
attempts to change the user’s environment such as:
- substance use + abstinence are readily detected
- abstinence is readily reinforced
- substance use results in loss of reinforcement
- the density of reinforcement derived from substance-free sources is increased
CM interventions have been modified & are specifically successful if:
- relatively low-value vouchers are delivered probabilistically
- when access to paid employment is used to reinforce abstinence
Interventions to reduce Bad habits
- contingency management
- reducing availability of substance
- increasing real or perceived cost of substance
- community reinforcement approach (CRA)
- behavioural couples therapy (BCT)
- Brief motivational Interventions
- Restructuring environments to enhance access to healthy choices
- substance-free activity sessions
- fading procedures
- contracts including deposit contracts
- pharmacological approaches to impulse control
12 executive function training (WM training)
Community Reinforcement Approach
focuses on assisting individuals to develop alternative reinforcement that is mutually incompatible with substance use
- includes counselling
Behavioural Couples Therapy (BCT)
attempts to increase the cost of substance use through the use
- of daily sobriety contracts - - ingestion of disulfiram
- by encouraging significant others to withhold reinforcement (if substance abusing partner drinks or uses substance)
Brief Motivational Interventions (BMIs)
- attempts to increase individuals motivation to change
- -> in part by fostering individuals awareness of costs & consequences of substance use
- discussion of pros and cons of substance use
- personalised feedback that highlights tangible costs of use
- removing drugs & associated paraphernalia (pipes, needles…) from home to remove triggers
- direct or indirect alleviation of withdrawal symptoms
Substance-free activity sessions (SFAs)
aims to enhance motivation to pursue stated goals (in BMI) & provide a specific and personally tailored roadmap to achieve future goals
- as part of BMI –> e.g. 50 min SFA followed by BMI session
- targets substance-free activities & temporal discounting
- include personalised feedback
Behavioural economics
refers to the hybridisation of concepts and methods from psychology & economics to understand ppls choices
