Marijuana and Utility Maximization

Abstract

Marijuana is widely believed to contribute to bad choices, but we suggest that marijuana’s influence depends on the decision’s context and the standard used to evaluate choices. We examine marijuana’s effect on the widely accepted standard of rationality in economics: utility maximization. Two experiments reveal that marijuana consumption increases utility maximizing choices of responders in the ultimatum game. After consuming marijuana, both patients at a Colorado medical marijuana dispensary (study 1) and patrons at a Dutch coffee shop (study 2) were more likely to accept an unequal but personally beneficial monetary offers, though the effect was more robust for non-habitual users. Our inquiry illustrates the incompatibility between arguing that marijuana impairs decision-making and using utility maximization as a standard to assess the rationality of decision makers.