A review of studies examining the impact of immediate availability of tempting options with long-term negative consequences.

1. (appealing) Availability(eventually) Beats (rational) Cognition Dr. Russell James III Texas Tech University

2. Our choices and our satisfaction are driven by the comparisons we make Nearby additional Alternative Future Past Expected Current Multiple Alternative Relevant Observed

3. Behavioral Economics Concepts Loss Aversion; Endowment Effect; Status Quo Bias Availability Effects Endogenous Determination of Time Preference Nearby additional Alternative Future Past Expected Current Hedonic Adaptation Placebo Effect; Stereotypes Multiple Alternative Anchoring; Paradox of Choice Peer Effects; Relative Standing Relevant Observed

4. The Dual-Self Model of Consumer Choice Long-term/patient Planner Impartial spectator Deliberative Cold state Short-term/impulsive Doer Passions Affective/Visceral Hot state

5. The elephant understands certain emotions and drives Long-term Patient Planner Impartial spectator Deliberative Cold state Hunger Anger Fear Lust Thirst Pain Short-term Impulsive Doer Passions Affective/Visceral Hot state To stay “G” rated, let’s look at hunger…

6. These would taste good, but doughnuts fried in oil are high in saturated fat and sugar, which would make me fatter, slower, and less healthy. Hunger conflict Eat them all now! Long-term Patient Planner Impartial spectator Deliberative Cold state Short-term Impulsive Doer Passions Affective/Visceral Hot state

7. Why is choice of environment important? (appealing) Availability (eventually) Beats (rational) Cognition

8. Good experience, but offset by long-term results. appealingAvailabilityeventuallyBeats rationalCognition Eat them all now! When the rider is vigilant, the rider may temporarily succeed. But, when the rider eventually becomes tired or distracted, immediate availability will win.

9. When the rider becomes distracted immediate availability wins… Group memorizing 2-digit number chose chocolate cake 41% of the time Group memorizing 7-digit number chose chocolate cake 63% of the time

10. When the rider becomes distracted immediate availability wins…

11. appealingAvailability eventuallyBeats rational Cognition “Availability of … energy dense foods, is also a major risk factor for other consumption related pathology, such as certain forms of obesity and type-2 diabetes.” Ahmed, S. (2005) Imbalance between drug and non-drug reward availability: A major risk factor for addiction. European Journal of Pharmacology, 526, p. 11.

12. “alcohol problems vary with alcohol availability; this body of evidence is among the strongest bodies of evidence in existence linking health problems to determinants.” Mann, 2005, Availability as a law of addiction. Addiction, 100, p. 924. appealingAvailability eventuallyBeats rational Cognition

13. appealingAvailability eventuallyBeats rational Cognition “Drinking and alcohol related problems can be affected by restriction of the hours and days of alcohol purchasing and of the numbers and types of alcohol outlets.” Room, Babor, & Rehm, 2005, Alcohol and public health. The Lancet, 365, p. 526.

14. appealingAvailabilityeventuallyBeats rationalCognition “Among environmental factors, drug availability represents a major risk factor. Increased drug availability can precipitate the transition to addiction” Ahmed, S. (2005) Imbalance between drug and non-drug reward availability: A major risk factor for addiction. European Journal of Pharmacology, 526, p. 11.

15. Does physicians’ greater drug knowledge protect them against greater availability?

16. Physicians in the U.S. use more opiates and benzodiazepine than others of the same age Male physicians in Sweden were more than twice as likely to be using tranquilizers as non-physicians “A higher percentage of drug users among physicians can be due to the fact that self-treatment is widespread” Rosvold, E. (U. of Oslo), Vaglum, P. (U. of Oslo), Moum, T. (U. of Oslo), 1998, Use of minor tranquilizers among Norwegian physicians. A nation-wide comparative study. Social Science & Medicine, 46, 581-590.

17. Excessive availability increases consumption I’ll have just a few…It’s not like I’m eating all 40!

18. Excessive availability increases consumption For any Scarface fans, you may recall that this environment did not produce a happy ending…

19. A lab experiment Group A 5 unlimited bottles of water and 1 unlimited bottle of sugar water Group B 1 unlimited bottle of water and 5 unlimited bottles of sugar water a) Group A consumed more sugar? b) Group B consumed more sugar? c) No difference?

20. Excessive availability increases consumption Tordoff, M. G. (2002) Obesity by choice: The powerful influence of nutrient availability on nutrient intake. American Journal of Physiology – Regulatory, Integrative and Comparative Physiology, 282, 1536-1539.

21. Excessive availability increases consumption Group A Average fat content of rats after 36 days: 57 grams Group B Average fat content of rats after 36 days: 76 grams Both groups had unlimited access to Purina rodent chow during the test.

22. Excessive availability increases consumption Any relevance for humans?

23. What about alcohol? Group A 5 unlimited bottles of water and 1 unlimited bottle of 10% alcohol Group B 1 unlimited bottle of water and 5 unlimited bottles of 10% alcohol Did it make any difference?

24. Excessive availability increases consumption Group A Alcohol intake grams per kilogram of mouse body weight: 9.4 Group B Alcohol intake grams per kilogram of mouse body weight: 23.4 What about with different ratios? What about a different breed? What about a rat instead of mouse?

25. Excessive availability increases consumption Tordoff, M. G., & Bachmanov, A. A. (2003) Influence of the number of alcohol and water bottles on murine alcohol intake. Alcoholism: Clinical and Experimental Research, 27(4), 600-606.

26. “Large packages, plates, and serving bowls… have all been shown to increase how much a person serves and consumes by 15% to 45%.” B. Wansink (Cornell), D. Just (Cornell), & C. Payne (New Mexico State U), 2009, Mindless eating and health heuristics for the irrational. American Economic Review, 2009, 99(2), 165-169.

27. Experiment with Free Popcorn at a Movie Theatre One group got 240 g buckets One group got 120 g buckets If nobody finished all of the popcorn, did container size still matter?

28. Even though no one finished all of the popcorn, bigger portions->more eaten Group with large buckets consumed 85.6 grams on average. Group with medium buckets consumed 58.9 grams on average.

29. Another group was given 14-day old popcorn in medium and large buckets. “This popcorn tasted good” (1=strongly disagree; 9=strongly agree) Medium container: fresh = 7.7 old = 3.9 Large container: fresh = 6.8 old = 2.2 Did people eat more bad popcorn just because it was in a bigger container?

30. Bigger portions of bad popcorn = more eaten Group with large buckets of 14-day old popcorn consumed 50.8 grams. Group with medium buckets of 14-day old popcorn consumed 38.0 grams. Wansink, B. & Kim, J. (2005) Bad popcorn in big buckets: Portion size can influence intake as much as taste. Journal of Nutrition Education and Behavior, 37(5), 242-245.

31. Size v. Taste 6.8 Taste Rating 7.7 Taste Rating 2.2 Taste Rating 3.9 Taste Rating

32. The misperceived effects of availability “In one study, unknowing diners were served tomato soup in bowls that were refilled through concealed tubing that ran through the table and into the bottom of the bowls. People eating from these “bottomless” bowls consumed 73% more soup than those eating from normal bowls but estimated that they ate only 4.8 calories more.” B. Wansink (Cornell) & J. Sobal (Cornell), 2007, Mindless eating: The 200 daily food decisions we overlook. Environment & Behavior, 39(1), 106-123, p. 109.

33. Excessive availability and consumption In a study of 10 weight loss techniques, the most effective was using smaller, 10-inch, plates B. Wansink (Cornell), D. Just (Cornell), & C. Payne (New Mexico State U), 2009, Mindless eating and health heuristics for the irrational. American Economic Review, 2009, 99(2), 165-169.

34. In the previous study, not eating with the TV on was the second most effective technique for weight loss. Why might food availability during TV watching be especially relevant according to the dual-self approach? B. Wansink (Cornell), D. Just (Cornell), & C. Payne (New Mexico State U), 2009, Mindless eating and health heuristics for the irrational. American Economic Review, 2009, 99(2), 165-169.

35. Study of 10 weight loss techniques used by real world volunteers. The two most effect techniques changed only the eating environment. METHOD Lbs. of Monthly Weight Loss Use ten-inch plates for dinner −1.93 Don’t eat with the TV on −1.58 Eat fruit before snacking −1.11 Eat a hot breakfast −1.07 Eat vegetables and salad first −1.05 Use the half-plate rule −0.60 Store produce on middle refrigerator shelf −0.47 Limit snacks to three bites −0.29 Brush teeth instead of snacking +0.18 Eat oatmeal for breakfast +0.83 B. Wansink (Cornell), D. Just (Cornell), & C. Payne (New Mexico State U), 2009, Mindless eating and health heuristics for the irrational. American Economic Review, 2009, 99(2), 165-169.

36. Effects of knowledge… MBA students had 90 minute class to prove that if they snacked from gallon bowls of Chex Mix they would eat more than if they snacked from half-gallon bowls. At a Super Bowl party six weeks later, half were directed to a buffet table with two one-gallon bowls of Chex Mix, the other to a buffet table with four ½ gallon bowls. Did information prevent the bigger bowls from having an effect?

37. B Wansink, & MM Cheney (2005) Journal of the American Medical Association, 293(14), 1727-1728; B. Wansink, D. Just, & C. Payne (2009) American Economic Review, 2009, 99(2), 165-169.

38. The result of your knowledge… When asked afterwards if they believed the size of the serving bowls influenced them, the students said “no.” B Wansink, & MM Cheney (2005) Journal of the American Medical Association, 293(14), 1727-1728; B. Wansink, D. Just, & C. Payne (2009) American Economic Review, 2009, 99(2), 165-169.

39. The size of this bowl has nothing to do with how much we should eat. You watch TV. I’ll eat. Long-term Patient Planner Impartial spectator Deliberative Cold state Short-term Impulsive Doer Passions Affective/Visceral Hot state

40. Availability beats cognition even when… You know about the effects of environment on your decisions You don’t believe the environment is changing your decisions

41. Your KNOWLEDGE of the impact of environment on your behavior and your BELIEF about the impact of environment on your behavior doesn’t CHANGE the impact of the environment on your behavior.

42. So, what can we do? Whether we admit it or not, more knowledge won’t change the impact of environment on our behaviors. But, changing our environment can change our behaviors. We can focus more on choosing our environment!

43. So why don’t we choose our environment to match our goals? Hyperbolic discounting [We will make better choices in the future] Projection bias [The “rider” will always be in control] Diversification bias [We want maximum options]

44. For health reasons, I would like to increase the amount of raw vegetables, like carrots and celery, I eat. They don’t taste bad, but they aren’t that exciting, either. I would like to reduce the amount of sugar I eat, but I have problems with self-control because I really like sweets. What practical suggestions can you think of to help each person by employing the principal of “availability beats cognition”? Work with one or more people around you and discuss. Have one person write down all of the different suggestions you can come up with and sign all of your names to the page.

45. Slides by: Russell James III, J.D., Ph.D., CFP® Associate Professor Division of Personal Financial Planning Texas Tech University russell.james@ttu.edu Please use these slides! If you think you might use anything here in a classroom, please CLICK HEREto let me know. Thanks! The outline for this behavioral economics series is at http://www.slideshare.net/rnja8c/outline-for-behavioral-economics-course-component