Behavioral Economics Approach Research Articles

A Transient Dopamine Signal Represents Avoidance Value and Causally Influences the Demand to Avoid.

While an extensive literature supports the notion that mesocorticolimbic dopamine plays a role in negative reinforcement, recent evidence suggests that dopamine exclusively encodes the value of positive reinforcement. In the present study, we employed a behavioral economics approach to investigate whether dopamine plays a role in the valuation of negative reinforcement. Using rats as subjects, we first applied fast-scan cyclic voltammetry (FSCV) to determine that dopamine concentration decreases with the number of lever presses required to avoid electrical footshock (i.e., the economic price of avoidance). Analysis of the rate of decay of avoidance demand curves, which depict an inverse relationship between avoidance and increasing price, allows for inference of the worth an animal places on avoidance outcomes. Rapidly decaying demand curves indicate increased price sensitivity, or low worth placed on avoidance outcomes, while slow rates of decay indicate reduced price sensitivity, or greater worth placed on avoidance outcomes. We therefore used optogenetics to assess how inducing dopamine release causally modifies the demand to avoid electrical footshock in an economic setting. Increasing release at an avoidance predictive cue made animals more sensitive to price, consistent with a negative reward prediction error (i.e., the animal perceives they received a worse outcome than expected). Increasing release at avoidance made animals less sensitive to price, consistent with a positive reward prediction error (i.e., the animal perceives they received a better outcome than expected). These data demonstrate that transient dopamine release events represent the value of avoidance outcomes and can predictably modify the demand to avoid.

Modeling managerial behavior in real options valuation for project-based environments

Project valuation, as a decision-making tool for initiating investments in projects, should be able to value project flexibilities and incorporate reasonable risk preferences of relevant decision makers. Real options valuation methods are the available approaches for valuing project flexibilities, whereas they have shortcomings in considering managers’ reasonable risk preferences in project decisions. Therefore, researchers have suggested approximating the perspective on risk of real options methods and practitioners in project management. This study proposes a fair real options valuation for project-based environments by a behavioral economic approach, which adopts binomial lattice method, Monte-Carlo simulation, and cumulative prospect theory. The results show that behavioral factors such as ‘risk attitude’ and ‘loss aversion’ should be accepted in project investment decisions while limited to an acceptable amount depending on the project conditions (e.g. uniqueness of decision-making scenarios). This research contributes to the project management domain by enhancing project investment decisions that include project flexibilities.

Locomotor activity does not predict individual differences in morphine self-administration in rats

Understanding factors contributing to individual differences in opioid addiction vulnerability is essential for developing more effective preventions and treatments. Sensation seeking has been implicated in addiction to several drugs of abuse, yet its relationship with individual differences in opioid addiction vulnerability has not been well established. The primary goal of this study was to evaluate the relationship between locomotor activity in a novel environment, a preclinical model of sensation-seeking, and individual differences in acquisition of i.v. morphine self-administration (SA) in rats. A secondary goal was to evaluate the relationship between activity and elasticity of demand (reinforcing efficacy) for morphine measured using a behavioral economic approach. Following an initial locomotor activity screen, animals were allowed to acquire morphine SA at a unit dose of 0.5 mg/kg/infusion in 4 hour/day sessions (Experiment 1) or 0.2 mg/kg/infusion in 2 hour/day sessions (Experiment 2) until infusion rates were stable. Unit price was subsequently manipulated via progressive reductions in unit dose (Experiment 1) or increases in response requirement per infusion (Experiment 2). Activity levels were not correlated with acquisition of morphine SA in either experiment. Morphine consumption was generally well described by an exponential demand function in both experiments (R2 values > 0.95 for rats as a group), but activity did not correlate with behavioral economic measures. Locomotor activity in a novel environment did not predict individual differences in acquisition of morphine SA. These data complement findings from some human studies and suggest that the role of sensation seeking in individual differences in opioid addiction vulnerability may be limited.

Experimental and Behavioral Economic Approaches and Application to Regional Agricultural and Forestry Economic Studies

Experimental and Behavioral Economic Approaches and Application to Regional Agricultural and Forestry Economic Studies

A behavioral economics approach to the failed HPV vaccination program in Japan.

A behavioral economics approach to the failed HPV vaccination program in Japan.

A transient dopamine signal encodes subjective value and causally influences demand in an economic context

The mesolimbic dopamine system is strongly implicated in motivational processes. Currently accepted theories suggest that transient mesolimbic dopamine release events energize reward seeking and encode reward value. During the pursuit of reward, critical associations are formed between the reward and cues that predict its availability. Conditioned by these experiences, dopamine neurons begin to fire upon the earliest presentation of a cue, and again at the receipt of reward. The resulting dopamine concentration scales proportionally to the value of the reward. In this study, we used a behavioral economics approach to quantify how transient dopamine release events scale with price and causally alter price sensitivity. We presented sucrose to rats across a range of prices and modeled the resulting demand curves to estimate price sensitivity. Using fast-scan cyclic voltammetry, we determined that the concentration of accumbal dopamine time-locked to cue presentation decreased with price. These data confirm and extend the notion that dopamine release events originating in the ventral tegmental area encode subjective value. Using optogenetics to augment dopamine concentration, we found that enhancing dopamine release at cue made demand more sensitive to price and decreased dopamine concentration at reward delivery. From these observations, we infer that value is decreased because of a negative reward prediction error (i.e., the animal receives less than expected). Conversely, enhancing dopamine at reward made demand less sensitive to price. We attribute this finding to a positive reward prediction error, whereby the animal perceives they received a better value than anticipated.

Oxidative damage and energetic crisis in cardiomyocites after co-exposure of cocaine and morphine

Understanding factors contributing to individual differences in opioid addiction vulnerability is essential for developing more effective preventions and treatments. Sensation seeking has been implicated in addiction to several drugs of abuse, yet its relationship with individual differences in opioid addiction vulnerability has not been well established. The primary goal of this study was to evaluate the relationship between locomotor activity in a novel environment, a preclinical model of sensation-seeking, and individual differences in acquisition of i.v. morphine self-administration (SA) in rats. A secondary goal was to evaluate the relationship between activity and elasticity of demand (reinforcing efficacy) for morphine measured using a behavioral economic approach. Following an initial locomotor activity screen, animals were allowed to acquire morphine SA at a unit dose of 0.5 mg/kg/infusion in 4 hour/day sessions (Experiment 1) or 0.2 mg/kg/infusion in 2 hour/day sessions (Experiment 2) until infusion rates were stable. Unit price was subsequently manipulated via progressive reductions in unit dose (Experiment 1) or increases in response requirement per infusion (Experiment 2). Activity levels were not correlated with acquisition of morphine SA in either experiment. Morphine consumption was generally well described by an exponential demand function in both experiments (R2 values > 0.95 for rats as a group), but activity did not correlate with behavioral economic measures. Locomotor activity in a novel environment did not predict individual differences in acquisition of morphine SA. These data complement findings from some human studies and suggest that the role of sensation seeking in individual differences in opioid addiction vulnerability may be limited.

Reward-related decision making and long-term weight loss maintenance

BackgroundHeightened sensitivity towards reward and insensitivity towards disadvantageous consequences may constitute a driving factor underlying unrestricted food intake and consequent weight gain in people with overweight and obesity. Therefore, the present study applied a behavioral economics approach to investigate the potential contribution of poor reward-related decision making to unsuccessful long-term weight loss maintenance (i.e. weight cycling). Based on previous research, it was expected that successful long-term weight loss maintainers would show a better performance in a gambling task than their less successful counterparts. MethodsReward-related decision making was assessed post hoc using the Game of Dice Task in a total of 33 overweight and obese women who had either (a) successfully maintained initial weight loss of at least 10% of their body weight over one year or (b) had regained weight until at least their initial body weight prior to weight reduction (i.e. showed weight cycling). ResultsThe groups did not differ in terms of age, current body weight, magnitude of initial weight reduction, educational level, and global intelligence level. As hypothesized, however, the group of successful long-term weight loss maintainers performed significantly better (i.e. showed less impulsive, more advantageous choices) in the Game of Dice Task than their less successful counterparts. ConclusionsThe findings suggest that poor reward-related decision making is associated with weight cycling which is considered a key concern in weight loss treatments for overweight and obesity. Furthermore, the findings speak in favor of specific psychological interventions that are designed to bolster reward-related decision making.

Active Choice and Financial Incentives to Increase Rates of Screening Colonoscopy–A Randomized Controlled Trial

Behavioral economic approaches could increase uptake for colorectal cancer screening. We performed a randomized controlled trial of 2245 employees to determine whether an email containing a phone number for scheduling (control), an email with the active choice to opt in or opt out (active choice), or the active choice email plus a $100 incentive (financial incentive) increased colonoscopy completion within 3 months. Higher proportions of participants in the financial incentive group underwent screening (3.7%) than in the control (1.6%) or active choice groups (1.5%) (P= .01 and P < .01). We found no difference in uptake of screening between the active choice and control groups (P= .88). The $100 conditional incentive modestly but significantly increased colonoscopy use. ClinicalTrials.gov no: NCT02660671.

Effect of Electronic Reminders, Financial Incentives, and Social Support on Outcomes After Myocardial Infarction

Adherence to medications prescribed after acute myocardial infarction (AMI) is low. Wireless technology and behavioral economic approaches have shown promise in improving health behaviors. To determine whether a system of medication reminders using financial incentives and social support delays subsequent vascular events in patients following AMI compared with usual care. Two-arm, randomized clinical trial with a 12-month intervention conducted from 2013 through 2016. Investigators were blinded to study group, but participants were not. Design was a health plan-intermediated intervention for members of several health plans. We recruited 1509 participants from 7179 contacted AMI survivors (insured with 5 large US insurers nationally or with Medicare fee-for-service at the University of Pennsylvania Health System). Patients aged 18 to 80 years were eligible if currently prescribed at least 2 of 4 study medications (statin, aspirin, β-blocker, antiplatelet agent), and were hospital inpatients for 1 to 180 days and discharged home with a principal diagnosis of AMI. Patients were randomized 2:1 to an intervention using electronic pill bottles combined with lottery incentives and social support for medication adherence (1003 patients), or to usual care (506 patients). Primary outcome was time to first vascular rehospitalization or death. Secondary outcomes were time to first all-cause rehospitalization, total number of repeated hospitalizations, medication adherence, and total medical costs. A total of 35.5% of participants were female (n = 536); mean (SD) age was 61.0 (10.3) years. There were no statistically significant differences between study arms in time to first rehospitalization for a vascular event or death (hazard ratio, 1.04; 95% CI, 0.71 to 1.52; P = .84), time to first all-cause rehospitalization (hazard ratio, 0.89; 95% CI, 0.73 to 1.09; P = .27), or total number of repeated hospitalizations (hazard ratio, 0.94; 95% CI, 0.60 to 1.48; P = .79). Mean (SD) medication adherence did not differ between control (0.42 [0.39]) and intervention (0.46 [0.39]) (difference, 0.04; 95% CI, -0.01 to 0.09; P = .10). Mean (SD) medical costs in 12 months following enrollment did not differ between control ($29 811 [$74 850]) and intervention ($24 038 [$66 915]) (difference, -$5773; 95% CI, -$13 682 to $2137; P = .15). A compound intervention integrating wireless pill bottles, lottery-based incentives, and social support did not significantly improve medication adherence or vascular readmission outcomes for AMI survivors. clinicaltrials.gov Identifier: NCT01800201.

A Behavioral Economics Approach to Residential Electricity Consumption

Consumer behavior is complex and is difficult to represent in traditional economic theories of decision-making. This paper focuses on the development of an agent-based approach to analyze people’s behavior in consuming electricity using a behavioral economics framework, where the consumer is the main agent of power systems. This approach may bring useful insights for distribution companies and regulatory agencies, helping to shift thinking to a more user-centric approach. The emergent properties of electricity consumption are modeled by the means of consumer’s heuristics, taking into account the electricity price, consumer’s satisfaction level, willingness to invest in new technologies, social interactions, and marketing strategies by the power utility. Analysis on the emergent behavior of this approach through simulation studies showed that it is indeed valuable, as does not require in-depth data of all details on human behavior. However, it contributes to the understanding of relations among various objects involved in electricity consumption.

A Behavioral Economic Approach to Green Consumerism: Demand for Reusable Shopping Bags

The success of behavioral economics is underscored by its emerging role in informing public policy. While applied behavioral economics has almost exclusively investigated pharmacological issues or the reinforcing efficacy of stimuli used in educational and clinical settings, we propose that this technology can be applied to the understanding and promotion of sustainable purchases in the American marketplace. Many communities have begun to adopt measures promoting such sustainable purchasing, but a conceptual understanding of proper pricing for these “green” products is lacking. An empirical foundation upon which to model prices can aid in generating revenue for distributors while simultaneously nudging sustainable decision-making on the part of the consumer. This report describes a study that successfully translates behavioral economic concepts to demand for sustainable products. A secondary contribution is the demonstration of relations between behavioral economic demand indices and scores on the New Ecological Paradigm Scale (i.e., construct validity), a renowned scale used by environmental psychologists and ecological economists.

Assessment of the Specificity of the Effects of Rimcazole on the Reinforcing Effects of Cocaine Using a Behavioral Economic Approach

Previous research has shown that cocaine self‐administration is decreased by rimcazole, a sigma (σ) receptor antagonist that also binds to the dopamine transporter (DAT). However, it is uncertain if those decreases are due to an action of rimcazole on the reinforcing effect of cocaine. One way to assess reinforcing effects is with an analysis of demand curves that show the decreases in consumption of a reinforcer with increasing cost. From the demand curve, the fitted parameters for consumption at no cost (Q0) and the essential value of the reinforcer (EV, a measure derived from the sensitivity to price) can be derived. Because rimcazole has actions at both the DAT and σ receptors, its effects were compared to that of combinations of a σ receptor antagonist (BD 1008) and a standard DAT inhibitor (methylphenidate). Rimcazole (3.2, 10 and 32 mg/kg) or vehicle were administered (i.p.) to male Sprague‐Dawley rats 5 minutes before sessions in which the number of lever presses required per infusion for either of two doses of cocaine (0.1 or 0.32 mg/kg/infusion) or food (three 20 mg pellets) were increased within sessions. The effects of combinations of methylphenidate (1 mg/kg i.p.) and different doses of BD 1008 (0, 3.2, 10 mg/kg) on the demand curve for cocaine (0.1 or 0.32 mg/kg/infusion) or food were determined under similar conditions. Demand curves were fitted to the data using an exponential model (Hursh and Silberberg, Psyc Rev 115: 186, 2008). Rimcazole dose‐dependently decreased both Q0 and EV at doses that had no effect on food‐reinforced responding. The combination of methylphenidate and the highest dose of BD 1008 also decreased Q0, though only at the 0.1 mg/kg/infusion dose of cocaine. In contrast the combination had no effect on the behavioral economic parameters derived from food‐reinforced responding. The present results indicate that rimcazole specifically alters the reinforcing effects of cocaine, but not food. Further, the similarity in effects of the combinations of methylphenidate and BD 1008 to rimcazole suggests that dual inhibition of both the DAT and σ receptors shows specificity in decreasing the reinforcing effects of cocaine and may provide targets for discovery of a combination chemotherapy for cocaine abuse.Support or Funding InformationThis work was supported by NIDA/NIH.

Brazil and Germany: a behavioral law and economics approach to standard form contracts

Consumer relations are strongly influenced by the market economy, which can be seen as a reflection of the globalization faced by contemporary society. Standard form contracts appear as a demand of this economic and globalized world, since they can provide greater uniformity, rapidity, efficiency and dynamism to contractual relations. Behavioral economics assumes that consumers suffer from cognitive limitations in processing information. Considering this and relying on a theoretical framework, the biases that influence the choices of a consumer who concludes a standard form contract will be studied from the point of view of Behavioral law and economics.

Cocaine Potency at the Dopamine Transporter Tracks Discrete Motivational States During Cocaine Self-Administration.

Although the dopamine transporter (DAT) is the primary site of action for cocaine, and the dopamine system is known to mediate the reinforcing effects of cocaine, the dopaminergic variations underlying individual differences in cocaine self-administration behaviors are not fully understood. Recent advances in the application of economic principles to operant tasks in rodents have allowed for the within-subject, within-session determination of both consummatory and appetitive responding for reinforcers. Here we combined a behavioral economics approach with cocaine self-administration and ex vivo voltammetric recording of dopamine signaling in the core of the nucleus accumbens of rats to determine the relationship between dopamine signaling and discrete aspects of cocaine taking and seeking. We found neither dopamine release or uptake tracked individual differences in cocaine consumption or the reinforcing efficacy of cocaine. Cocaine potency at the DAT was correlated with reinforcing efficacy, but was not related to cocaine consumption. Further, we introduce a novel analysis that determines perseverative responding within the same procedure, and find that cocaine potency at the DAT also tracks differences in perseverative responding. Together, we demonstrate that cocaine effects at the DAT determine the reinforcing efficacy of cocaine, and perseverative responding for sub-threshold doses of cocaine that do not maintain responding when presented in isolation. Surprisingly, we find that variations in cocaine potency do not account for differences in cocaine consumption, suggesting that satiation for cocaine is determined by other targets or mechanisms. Finally, we outline a novel approach for relating drug-target interactions and potency to discrete motivational states during a single self-administration session.

Why do borrowers choose suboptimal mortgage contracts?: A behavioral economics approach

Mortgage contracts have evolved to include a variety of contract design features whose aim is to address the demand of heterogeneous borrowers. Given that borrowers know best their budget constraints and preferences for risk exposure, the question is why many borrowers fail to maximize their welfare through the choice of mortgage contract. The aim of this paper is to explain the causes of suboptimal outcomes in the mortgage market, relying on the theoretical framework of behavioral economics. The first part of the paper provides an overview of the main differences between the rational choice and behavioral economics approach to contract efficiency and discusses the most relevant cognitive biases, identified within behavioral economics. The second part of the paper applies the findings of the two approaches to the issue of mortgage contracts. Considerable attention is devoted to contract design features that are expected to exacerbate the borrower's cognitive biases. Finally, the paper addresses the issue of why market forces fail to 'debias' borrowers and, hence, eliminate inefficient mortgage terms.

Behavioural Economics Approach: Using Investors Sentiment Indicator for Financial Markets Forecasting

Behavioural Economics Approach: Using Investors Sentiment Indicator for Financial Markets Forecasting

Behavioral Economic Approaches to Increase Workplace Physical Activity from Research to Reality

Behavioral Economic Approaches to Increase Workplace Physical Activity from Research to Reality

Behavioral Economic Approaches to Influencing Children’s Dietary Decision Making at School

The health benefits of consuming fruits and vegetables (FVs) are clear, but most children do not eat them regularly. At school, FVs are available, but children often refuse them or throw them away. This review article illustrates the evidence for and against behavioral–economic approaches to increasing FV consumption in schools. Simple but effective interventions include prompting children to take FVs and serving vegetables before other foods are available. Also effective is reducing their handling costs (e.g., serving sliced fruit) and opportunity costs (e.g., scheduling lunch after recess). Still larger improvements can be achieved by improving the taste of FVs, or by incentivizing consumption. Although controversial, even small incentives can produce immediate and lasting effects. Game-based virtual incentives can reduce the costs of incentive systems, while minimizing concerns that children are being bribed into healthy habit formation.

The effects of perceived quality on behavioral economic demand for marijuana: A web-based experiment

BackgroundGiven the growing legalization of recreational marijuana use and related increase in its prevalence in the United States, it is important to understand marijuana's appeal. We used a behavioral economic (BE) approach to examine whether the reinforcing properties of marijuana, including “demand” for marijuana, varied as a function of its perceived quality. MethodsUsing an innovative, Web-based marijuana purchase task (MPT), a sample of 683 young-adult recreational marijuana users made hypothetical purchases of marijuana across three qualities (low, mid and high grade) at nine escalating prices per joint, ranging from $0/free to $20. ResultsWe used nonlinear mixed effects modeling to conduct demand curve analyses, which produced separate demand indices (e.g., Pmax, elasticity) for each grade of marijuana. Consistent with previous research, as the price of marijuana increased, marijuana users reduced their purchasing. Demand also was sensitive to quality, with users willing to pay more for higher quality/grade marijuana. In regression analyses, demand indices accounted for significant variance in typical marijuana use. ConclusionsThis study illustrates the value of applying BE theory to young adult marijuana use. It extends past research by examining how perceived quality affects demand for marijuana and provides support for the validity of a Web-based MPT to examine the appeal of marijuana. Our results have implications for policies to regulate marijuana use, including taxation based on the quality of different marijuana products.