The Harlot’s Addiction — Part 1: Rational Addiction

A few weeks ago, Maggie McNeill, the Honest Courtesan, wrote about the use and abuse of the word addiction:

The belief that people can become “addicted” to things that do not produce chemical dependency (food, sex, the internet, etc) is fallacious in two ways.  The first, which we have discussed before, is a confusion of the concept of addiction (physical and psychological dependence on a substance which affects biochemistry in such a way as to render normal physiological function impossible without the substance) with the related concepts of habituation (psychological reliance on a substance which is not physiologically addictive) and obsession (psychological fixation on a behavior).

Maggie goes on to make the point that some people who want to save women from prostitution treat them as if they were addicts, denying their personal agency and freedom. This struck a bell, and reminded me of an interesting economic theory I’ve heard about, so I started to write one of my thinking-out-loud posts about it, and I ended up with enough speculations and conjectures to fill several posts, of which this is the first.

I’m going to have to deviate from Maggie’s purist usage of addiction, however. In some contexts, it’s common to limit addiction to chemical dependency as Maggie does, but in typical usage it has a broader meaning, and I think that broader meaning is more useful. I’d rather use addiction to describe the behavior, and use terms like habituation and chemical dependency to describe the reason for the behavior.

In any case, when I talk about addiction in this series of posts, I’m talking about any behavior that appears to be habit-forming or compulsive.

Economists have some difficulty analyzing the concept of addiction because it appears to overturn one of the critical assumptions of economics: That people rationally choose to consume more of things they think will improve their lives. But that assumption doesn’t seem to apply to addicts in the usual sense who are, almost by definition, engaging in behavior that is causing them harm, which seems to conflict with the idea that they are rational agents.

It would be easy to explain addiction by assuming that addicts are indeed irrational, but that answer doesn’t satisfy economists because it explains too much. You can explain any human behavior you don’t understand by declaring it irrational. And that’s no explanation at all. It’s certainly not an explanation you can verify with experiments and studies.

Economists have tried a number of ways to address the problem of addiction without completely abandoning the assumption of rationality, but the one which interests me here is the theory of rational addiction, which attempts to explain addictive behavior by assuming that under certain conditions past consumption will increase the benefits of future consumption. For example, first-time marijuana users often find it unpleasant, but if they keep trying marijuana, they eventually get used to it. Having used it before, they now gain greater benefits from using it again, so they use it more and more.

This is a special case of what economists call complementary goods, which are goods that make each other more useful to consumers, so that an increase in consumption of one leads to an increase in the other. For example, high-def video players are more enjoyable if you have a big-screen television, and big-screen televisions are more valuable if you have a high-def video player, so the sales of both tend to increase together, which makes them complementary goods. Other examples are peanut butter and jelly, hamburgers and french fries, and gin and vermouth. We say that all these are complementary goods. Rational addiction results from inter-temporal complementarity, in which consumption of a good is complementary to consumption of the same good at a later time. Consuming more of the good today leads to consuming more of the good tomorrow.

This doesn’t seem like a good explanation for all addictive behavior — it’s hard to see how heroin addicts living in the streets could really be pursuing a rational addiction. Nevertheless, as with many counter-intuitive economic theories, it has produced a some successful predictions under surprising circumstances. And I think it could be a good explanation for the more figurative forms of addition.

Consider the malady of “video game addiction,” which many serious people pretend is a real thing, at least when they can make money off of it. Although such behavior could be a sign of a mental disorder — people can become obsessive about anything — it strikes me as far more likely to be a case of rational addiction. Video games are often difficult and confusing to play at first, leading to a frustrating experience, but players who keep at it long enough will become good at the games and learn to appreciate the artistry, technology, and style of the games, so they enjoy them a lot more.

This is actually a pretty common human experience, because the logic of rational addiction applies to almost anything that is an acquired taste. Wine tasters have to train the palate before they can appreciate the intricacies of fine wines. Rap music is more enjoyable when you learn about its history and movements and understand how the artists have influenced each other. Soccer is a lot more fun to watch once you understand how to recognize skillful play. Without taking the time to acquire the taste, wine is just bittersweet liquid, rap is just yelling, and soccer is just a bunch of people running around on the grass.

It’s easy to see how this could be confusing to outsiders. They haven’t done the past consumption, so they don’t experience the extra benefits, which makes it harder for them to understand other people’s desire for such consumption. Soccer looks boring to many Americans who haven’t grown up with it as part of their culture. Chinese martial arts movies and steamy romance novels both seem silly if you don’t know the dramatic conventions of the respective genres. Many members of the rock-and-roll generation hated rap and thought disco sucked.

Note that I’m not talking about differences in taste. Taste is a subjective difference between people’s preferences — some people enjoy jazz, and some people enjoy hip-hop — there’s no accounting for it, and economists don’t even try. What I’m talking about is a purely objective difference: Even if we all had exactly the same tastes, we could end up with different levels of demand for different types of goods depending on our prior consumption experiences.

Nevertheless, rational addiction is related to taste, in that they are both reasons for people to make bigoted mistakes in judgement. Just as some people mistake their personal tastes for the universal measures of quality, they also fail to take into account that other people’s differing histories may have lead them to different opinions about the value of certain consumption.

Not only do outsiders not experience the extra benefits from prior experience, but they fail to recognize that such benefits are even possible. This leads to a narrow-mindedness that is very much like bigotry — the same people who rant about video game addiction will speak admiringly about people who spend many hours practicing the piano or training for a marathon. In the worst case it can result in discriminatory rules and legislation.

I should emphasize that the word “addiction” as used in rational addiction theory is not judgmental or indicative of some kind of moral failing. Murphy and Becker developed the basic idea behind rational addiction by studying addictive behavior, but it applies to any behavior where past consumption increases the benefits of future consumption. Had they begun their studies with wine tasting or dog shows, they might have called it “acquired taste.”

Next post in this series: How all this applies to unpleasant jobs.

One Response to The Harlot’s Addiction — Part 1: Rational Addiction

  1. […] Among other things, he and Kevin Murphy were pioneers in the idea of rational addiction, which I wrote about last year. That was just one example of his approach to applying the tools of economic thinking to […]

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