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Carrasco, Sampedro

Week 6 Chapter 7: Behavioral economics Behavioral economics and maternal and child health Behavioral economics to design persuasive communications Behavioral economics and regulatory analysis. Carrasco, Sampedro . Behavioral Economics .

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Carrasco, Sampedro

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  1. Week 6 Chapter 7: Behavioral economics Behavioral economics and maternal and child health Behavioral economics to design persuasive communications Behavioral economics and regulatory analysis Carrasco, Sampedro

  2. Behavioral Economics This approach emphasizes importance of people’s values, decision making preferences & choices they make as essential determinants.

  3. Commodities (tangible consumable products) • Distal causes • Smoking • Alcohol • Drugs • Obesity • All common causes for morbidity & mortality

  4. Trainspotting play clip • consequences • theme

  5. Intellectual Foundations & History Two essential characteristics • emphasis on individual person as the unit of analysis • focus on understanding the nature of rationality and irrationality in human behavior

  6. Emphasis on individual person as the unit of analysis • Extreme versions of microeconomics: the person • “Picoeconomics” • “the study of the allocation of behavior within a system of constraints” • fundamentally seeking to understand the factors that influence how people make transactions with the world

  7. Focus on understanding the nature of rationality and irrationality in human behavior • Rational decision making is a common assumption in economics BUT… • Irrational preferences and behavior have long been recognized

  8. Focus on understanding the nature of rationality and irrationality in human behavior • “Animal spirits,” or powerful subjective experiences → spontaneous urge to action” • Rational Agent “ Homo economicus” • Homo irrationalis-the typical person whose decisions are subject to an array of irrational factors that disproportionately influence the choices he or she makes.

  9. Earliest form of behavioral economics 1st form- Provides a mathematical analysis of strategic interaction between individuals. • “prisoner dilemma” 2nd form-Integration of cognitive psychology and economics. • prospect theory (134) Matching Law is matching between organism’s behavior and relative reinforcement available

  10. Quantifying Relative Value of Addictive Drugs and other Commodities Law of Demand is arguably the most fundamental law of economics, referring to the inverse relationship between consumption and price.

  11. Quantifying Relative Value of Addictive Drugs and other Commodities continued... • Demand • Demand curve analysis • Intensity of demand • Breakpoint • Inelastic and elastic portions • Elasticity • Pmax • Laboratory demand paradigms • Purchase tasks

  12. Behavioral Economic Decision-Making Biases and Health Behavior • Delay Discounting • Probability Discounting

  13. Delay Discounting • behavioral economic measure of impulsivity • refers to how much a reward is devalued based on its temporal distance • capacity to delay gratification

  14. Delay and Probability Discounting Probability Discounting • refers to how sensitive a person is to the risk associated with rewards • how much a reward is discounted based on the probability of its receipt

  15. Application to Health Behavior • Applicability of probability discounting to health behavior is highly intuitive • not all unhealthy behavior result in negative outcomes • Pathological gambling • If an individual is highly willing to accept increased risk of negative outcomes for a greater reward, the cost-benefit ratio may be acceptable

  16. Behavioral Economic Interventions • These interventions focus on individuals rather than groups of people • Reduce the relative value of the substance (or outcome) by altering environmental factors • Community Reinforcement Approach (Macrocosmic) • Contingency Management (Microcosmic)

  17. Community Reinforcement Approach • Objectives • reducing the value of substance use and • enhancing the value of alternative behaviors by reestablishing and identifying new forms of reinforcement that are mutually exclusive from substance use • Examples: social/leisure activities, interpersonal relationships, employment, psychosocial problem solving

  18. Contingency Management • Objectives: • Enhance value of treatment-enhancing behaviors through positive reinforcement • Using vouchers, prizes etc. • Examples: abstinence, treatment attendance, medication compliance

  19. Summary • The choices people make are critical determinants of health and unhealthy behavior • The goal of behavioral economics is to understand this “crucible of choice”: the wide array of factors that affect and determine values, preferences and the decisions we make

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