Bryan Caplan  

The Market for Less

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Guest blogger James Schneider makes a thought-provoking point about the market for self-control:
The market is often better at abetting good habits than it is at discouraging bad habits. Imagine an alternate world in which a lot of people aspired to smoke more cigarettes but they had trouble sticking to their preferred regimen. In this alternate world, the market might offer yearly memberships that shipped people a carton of cigarettes every week. Or, pharmacies might sell a membership pass, where you get a free or discounted pack of cigarettes every day. These arrangements would incur a fixed cost, but they would lower the incremental cost of smoking additional cigarettes -- thus helping you to achieve your goal of smoking more. However, it would be harder for the market to inflate the future cost of cigarettes in the more likely event that you needed help reducing your smoking. Imagine explaining to the local Quickie Mart that higher cigarette prices would further your health goals. What would happen if Quickie Mart obliged your strange request and promised to inflate the price of cigarettes that they sold specifically to you? When cravings struck, you would just buy your cigarettes at a different store.
At first glance, this is a powerful asymmetry.  Indeed, in slogan form you might say, "There is no such thing as a 'market for less.'"  But can this slogan really withstand critical scrutiny?

If you've had intermediate microeconomics, the simplest response is to say, "Raising the price of x relative to y is equivalent to lowering the price of y relative to x."  So if you want to make tobacco more expensive relative to non-tobacco, you don't have to directly raise the price of tobacco.  You could instead cut the price of everything else.  Using James' "yearly membership" approach, a store like CostCo could (a) charge a high membership fee, (b) have cheap prices for everything except tobacco, and (c) have regular prices for tobacco - or simply not carry the vile weed. 

If you learned your intermediate microeconomics well, however, you might fret about the income effect.  The cheap prices for all non-tobacco products effectively enrich you.  As a result, you might take your savings and spend it on tobacco, thwarting your personal self-control project.  (For a single item, in contrast, this income effect would probably be trivially small).

Is there a substitute that avoids such income effects?  Sure.  Remember stickK.com?  The logic is simple: Precommit to forfeit some money if you buy too much of the wrong thing.  Want to smoke less?  Fine.  Commit to pay $100 for every pack of cigarettes you smoke - no matter where you buy it.  Won't you try to wriggle free?  Maybe.  But you could also precommit to buy everything with credit cards and send your monitor copies of all your receipts. 

The cleaner approach, though, is to base penalties on a periodic objective test.  For fatty foods, you could base penalties on the difference between your actual and desired weight.  For tobacco, you could base penalties on nicotine or Cotinine levels.

Most people will naturally whine that such tests are "inconvenient" or "intrusive."  Yet this whining helps us ballpark the seriousness of the problem.  If you aren't willing to do a weekly cheek swab to keep yourself on the straight and narrow, how much do you really care about your problem?

The honest answer for the average person, as far as I can tell, is "not much."  StickK.com remains a niche service.  The website brags that it has "$17,143,845 on the line" and takes credit for "2,502,250 cigarettes not smoked."  By start-up standards, that's impressive success.  By national or global standards, though, that's abject failure. 

In the end, I come to the same conclusion as James: There's isn't much demand for self-control.
The market offers a lot of programs that could easily be tweaked to be commitment devices. The fact that the market doesn't offer these commitment devices indicates that they probably aren't desired.
How can lack of demand be reconciled with all the excuses about lack of self-control?  I once again point to the psychological literature on Social Desirability Bias
Part of the reason why people who spend a lot of time and money on socially disapproved behaviors say they "want to change" is that that's what they're supposed to say.

Think of it this way: A guy loses his wife and kids because he's a drunk. Suppose he sincerely prefers alcohol to his wife and kids. He still probably won't admit it, because people judge a sinner even more harshly if he is unrepentent. The drunk who says "I was such a fool!" gets some pity; the drunk who says "I like Jack Daniels better than my wife and kids" gets horrified looks. And either way, he can keep drinking.

Cynical?  Certainly.  But when narrow-minded economic theory and broad-minded empirical psychology point in the same cynical direction, the cynics are probably on to something.



COMMENTS (14 to date)
Tom West writes:

The drunk who says "I was such a fool!" gets some pity; the drunk who says "I like Jack Daniels better than my wife and kids" gets horrified looks.

If previous postings are any guide, I get the impression that Bryan finds mental illness and limits to self-discipline to be moral failings.

I understand the impulse - after all, it begs questions about what is identity, or what is "you".

But as we learn more and more about how brains function, claiming the drunk "likes Jack Daniels better than my wife and kids" is sounding more like "He obviously likes cancer more than supporting his wife and kids" or "I guess he liked physical weakness more than rescuing his wife and child from the burning car".

The more we explore the brain, the more it seems that mental limits *are* physical limits.

Jameson writes:

This is where I get very uncomfortable with Caplan's moral vision of human beings. Tom West mentioned in his comment that mental limits are physical limits, but we don't even have to get that modern. Religions like Christianity have for centuries recognized the paradoxical frailty of the will--"What I want to do I do not do, but what I hate I do". Frankly, I think anyone who has never seen this is their *own life* is just lying to themselves. So I think the definition of "demand" used in this post is altogether insufficient to address the real human condition.

zhheng writes:

There are two factors affecting the purchase in the market. They are income and substitutes. Once you gain more income in a specific time,you will buy more cigarettes to fulfill your aspiration. if the price of substitutes rises,the price of this good will fall. These arrangement in market change the price and demand.

Daublin writes:

Once again I am surprised at what people find surprising.

Yes, some people have a mental problem. That's not the norm, though. Indeed, many people *say* they have a mental problem so they have an excuse to continue their favorite vice.

As evidence to Bryan's general point, how many of us have encountered someone that *did* get religion about cigarettes, alcohol, exercise, or diet? These people are phenomenal. In a matter of months they have changed into an entirely different person.

Given that such people exist, and are even rather common, what should we think about people that *say* they want to stop drinking but then make no apparent effort to do so?

Tom West writes:

Given that such people exist, and are even rather common, what should we think about people that *say* they want to stop drinking but then make no apparent effort to do so?

And given that occasionally cancer patients go into spontaneous remission...

I certainly understand the concept of "but they'll get away with it!" aka "better 10 innocent men are executed than a single guilty man go free."

And the reality is, that at this point, we have no means of distinguish between "those who can't" and "those who won't". I also understand that removing the social disapproval of bad habits may remove a factor that prevents people from succumbing to them.

But just as I don't think an intellectual, well-educated crowd needs to believe that victims of a plague are cursed by God in order to forcibly isolate them, I don't think we here need to pretend that only bad people have bad habits.

Children at age 5 already intrinsically believe that if a bad thing happens to someone, that means they deserve it. The Victorians were prone to the same. Surely we can manage a more nuanced view that reflects reality.

Joel writes:

Not to be Captain Obvious, but if you have to pay someone else to influence your own actions, is it really self control? Seems more likely another step in the eternal narrative of people who "just can't quit smoking."

I am similarly amused at the ubiquitous ads for diet pills that claim to help you lose weight without dieting or exercise. Seems to me that if you're not willing either to diet or exercise, then you don't really want to lose weight.

Daniel Reeves writes:

My wholly unbiased theory is that StickK is just doing it wrong. There are a growing number of apps and services offering commitment devices, and I think the Quantified Self movement will fuel further growth. Here's a list of all our competitors we know of: blog.beeminder.com/competitors

Danny of Beeminder (like StickK for lifehacking data nerds -- so, yes, targeting an even nichier niche)

Eric Hammer writes:

Tom, I don't think you are carefully reading why Bryan said. This is the key section when it comes to his view:

If you aren't willing to do a weekly cheek swab to keep yourself on the straight and narrow, how much do you really care about your problem?

The honest answer for the average person, as far as I can tell, is "not much."

The average person who complains about some habit they want to kick probably doesn't care that much, as evidenced by the fact that they are unwilling to take even the small steps towards fixing the problem. Many people say they want to lose weight or get in better shape, and of those people very few will start exercising more and watching what they eat, even in small blocks. (I am pretty well in that group.) One has to admit that when you can't be bothered to jog on the elliptical while watching a movie instead of sitting on the couch within 3' of the machine, you just don't care too much about the spare tire forming around your middle.

Sure, some people have physical issues that prevent them from taking action they would like to take. I can't keep down chicken no matter how hard I have tried. But that doesn't mean that everything I don't do but will say I should do to achieve some stated goal is because I am incapable of doing it. On average, probably less than half is because I am actually incapable given my current situation.

Caplan's point has nothing to do with calling a lack of self control a moral failing. In fact he often makes the point that closer goals are not necessarily worse than distant goals. It is just not socially acceptable to say as much, especially when society thinks you should have a particular distant goal like quitting drinking losing weight.

Now, if you will excuse me, I would like to go work on a paper I am writing, although I will probably find myself incapable and just go to bed instead. :)

Tom West writes:

Eric, while you (and Bryan) are correct, my point was reacting to a part of what Bryan framed here, and that he has brought up numerous times before.

So, yes, Mother Nature has designed most of us to value the short term over the long and then regret. But Bryan's posts tend to imply or even declare such limitations, up to an including mental illness, to be pretty close to a moral failing. Now such social approbation probably does help bolster flagging resolve, but I take issue with Bryan's moral judgement in light of what we know about how the brain works.

So, my point is addressing not just this particular post, but a larger trend, especially with regards mental illness.

I know it's convenient to believe that the depressed individual could just "get over it" if they truly wanted, and are thus to be held responsible for the effects of their inaction, but it's not accurate, and as cruel as claiming that those dying of cancer just don't want to live enough.

I find his attitude particularly surprising given the number of times that individuals with some degree of social difficulty are held responsible for their own bullying because they could avoid being victimized by "just acting normal", as if all that was required was enough will to do so. That is an attitude that has probably wrought more misery on the already victimized than actual bullying.

Lupis42 writes:

Tom,
I think you overestimate both Bryan's definition of a moral failing and the scope of mental illness here.

But Bryan's posts tend to imply or even declare such limitations, up to an including mental illness, to be pretty close to a moral failing.

A person is not morally culpable for their mental limitations, but they are morally culpable for their decisions given those limitations.

Just as a person who has a genetic predisposition to hypertension and heart disease, but knowing that nevertheless chooses a diet of bacon, cheese-fries, buttered popcorn and ice cream bears some responsibility for their inevitable heart failure, an alcoholic who drives to the bar is morally culpable for driving home drunk.
This holds even if an alcoholic in a bar is essentially incapable of not drinking, because not going to the bar, going with someone else, or getting a cab are reasonable options that do not require remarkable exercise of willpower or foreknowledge.

N. writes:

Unless, Tom, to be explicit, you are maintaining that we are not morally culpable for our actions in regards to our vices.

Eric Hammer writes:

Tom: You might be right that there is such a trend; I haven't read all of Bryan's posts. From my personal interactions with Bryan in a variety of different situations, however, I am pretty confident that he is not taking that moral position. I am quite certain that he does not think favoring certain short term goals over opposing long term goals is a moral failing in and of itself, and I suspect that the larger point he is attempting to make over the range of those posts is that society should probably stop favoring long term goals with special approbation compared to short term.

I might be wrong of course; I am not Bryan's secret confidant or anything. It is just that given my experience with him it seems like you might be reading something into what he writes that isn't there. I know of few people who attach less moral baggage to choices that don't hurt other people than Bryan does, and you certainly wouldn't be the first to assume he was more normal than he actually is! I think he quite likely would respond to someone saying "I love Jack Daniels more than my wife and kids" with "Huh. Not what I would choose, but ok."

It is also possible my fondness for Bryan is coloring my reading of him as well, I should add :D

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chipotle writes:

So I used to teach "Critical Thinking" AKA Informal Logic. If that were still my job, I'd use this as an example of the "Straw Man" fallacy:

Most people will naturally whine that such tests are "inconvenient" or "intrusive."

Where does this weak argument come from aside from the disdain for average people that Professor Caplan harbors deep in his breast?

Indeed, this is demonstrably false. Weight Watchers is a large, international corporation that sells the opportunity to follow a system to achieve weight loss. It is a well-known company not a fledgling or fly-by-night concern.

Those who choose to attend Weight Watchers meetings must "weigh-in"--literally step on a scale in front of all the WW peers in attendance-- at least once a month.

Self-control is difficult problem for almost everyone. It does not mean that the vast majority people are lazy, deluded whiners who never extricate them self from denial and (self-)deception.

Caplan clearly overdoes the cynicism in this post.

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