Third and "Final" Draft: Prospero Theory

The official due date for draft three was August 1, and while I felt I met that due date, I continued to tweak the paper until I posted it on ssrn on August 3: be the first to see Prospero Theory: Behavioral Economics and Shakesepare here. 

Here's the Abstract:

Prospect theory, a mainstay model of behavioral economics, was designed by Kahneman and Tversky (1979) to offer a better descriptive account of human decision making than that provided by rational choice theory -- and in many instances, it seems to deliver on its originators' goal. Descriptions of plausible human behavior, then, should generally accord well with the features of prospect theory. The writings of William Shakespeare -- an acclaimed observer of humanity -- provide a classic data set of human behavior that can be tested for its adherence to prospect theory. This paper explores Shakespeare's works, finding that the main elements of prospect theory-reference point dependence, loss aversion, and asymmetric gain/loss risk preferences are well represented within the Shakespeare canon. A second branch of behavioral economics, that examining happiness or "subjective wellbeing," also is reviewed in light of Shakespeare's works. Finally, Adam Smith, another acclaimed observer of humanity (who lived a little bit closer to Shakespeare's time than to ours), offers some parallel behavioral commentary, too.

Not sure about next steps -- Propspero Theory is not to everyone's taste, of that I am well assured. But I imagine I will send it to journal in the not too distant future, in something quite close to the current state.

I have made two intemperate claims that I would begin to work on a formal book prospectus on Shakespeare and Economics. I will re-up that claim now, and set August 15, 2025, as the deadline for reporting back. Yes, I am so chuffed with the revivification of Five Drafts that I plan to keep it active....

Draft Two of Behavioral Econ & the Bard

Yesterday was the deadline for the second of three drafts, and I indeed have a second draft (7,219 words). Still need to do a much better job of melding the "happiness" material, but at least now there is some happiness material. The attentive reader will recall that I also suggested a (rough) draft book prospectus for July 18, 2025, but that has yet to materialize. I will renew my commitment to it, but move the "deadline" to the BE/Bard third draft deadline, August 1, 2025. 

OK, back to regularly scheduled programming....

Overfulfilling the Plan?

About half a month ago I announced my intention to write a paper on Shakespeare and Behavioral Economics in three drafts, with the first draft due today. I am pleased (and really, shocked) to announce that I have had a first (shortish, about 5,200 words) draft for a week or so already, and even sent it to a friend and got helpful comments back! I'm now trying to expand it a bit with a still-unwritten section on happiness, so I don't yet have a coherent draft 1.5. But I am willing to say that I have overfulfilled the plan for the July 1 deadline. 

I won't post the draft, but here are the section titles:

1. Introduction

2. Three Elements of Prospect Theory

3. Shakespeare on Reference Points and Loss Aversion

4. Shakespeare on Being Risk-Loving in the Loss Domain

5. Reference Points, Sunk Costs, and Subjective Value

6. Happiness (in progress)

7. Conclusion: Choose Your Reference Point Well

The second draft is due on July 18, and I want to maintain (and meet) that deadline. (Not sure that I will indeed include a Happiness section in Draft Two.) But given that I am ahead of schedule, I want to be more ambitious: I want to have a very rough prospectus together by July 18 for a book on Shakespeare and Economics. 

Incidentally, in the post setting up the initial deadlines I also mentioned that I wanted to send Nudging Drug Use off to a journal; I have done so. The prudent behavior would be to have in mind the next journal to send it to after it is rejected... but maybe I have become more resilient? Or not...

The Promised Abstract

Prospero Theory: Behavioral Economics and Shakespeare

Jim Leitzel 

Abstract: Prospect theory, a mainstay model of behavioral economics, was designed by Kahneman and Tversky (1979) to offer a better descriptive account of human decision making than that provided by rational choice theory – and in many instances, it seems to deliver on its originators’ goal. Descriptions of plausible human behavior, then, should generally accord well with the features of prospect theory. The writings of William Shakespeare – an acclaimed observer of humanity – provide a classic data set of human behavior that can be tested for its adherence to prospect theory. This paper explores Shakespeare’s works, finding that the main elements of prospect theory – reference point dependence, loss aversion, and asymmetric gain/loss risk preferences – are well represented within the Shakespeare canon. Hamlet may be a rational actor (Leitzel 2023), but Shakespeare’s characters embrace prospect-theory-consistent behavior again and again.

One and one-half months for a paper on Shakespeare and Behavioral Economics!

Five Drafts is back! 

OK, there was that paper from three years ago about Nudging Drug Use. I did indeed produce an almost complete(?) version for an October, 2022 conference, but then did nothing more -- until the past month. Here's the ssrn.com version (posted yesterday, so still preliminary) of Nudging Drug Use! The recent surge of activity on the paper is related to my Winter 2025 revival, after a 15 year or so interregnum, of my Regulation of Vice course. The next step is to send Nudging Drug Use off to a journal. Let me suggest a tight deadline for that, say, June 16, 2025 -- Bloomsday!

While I am updating the situation with previous Five Drafts endevours, let me mention that the published version of the Parthenon Marbles paper, retitled "Athens or London? The Parthenon Marbles and economic efficiency," is available (open access) here.

But the recalling to life of Five Drafts has nothing to do with this previous, unfinished business. No, Five Drafts is back because I want to write a paper in the next 1.5 months or so. The paper is about Shakespeare and Behavioral Economics -- a topic I have been blogging about on and off over the years. The idea is to build my Shakespeare collection, which in terms of publications (but not of mulling) is miniscule: here's the one (open access -- do you sense a pattern?)! I'll post a schedule, maybe for an Abstract and three drafts, on the sidebar. For the Abstract (which will no doubt be wildly incompatible with the contents of the finished version of the paper), I'll go with tomorrow: June 15, 2025.

Excited to be back drafting!

Abstract for Nudging Illegal and Legal Drug Use

Much of the appeal of policy nudges is that when successful, they offer effectiveness at low cost, and without requiring coercion. But nudges are often used within regulatory regimes that also feature elements of coercion, as when forced savings plans such as social security are teamed with nudges designed to encourage pension contributions.

Drug prohibition is highly coercive and also quite venerable: arguments in support of, and in opposition to, the prohibition of recreational drugs are well-known. The growth of nudge theory and practice suggests a new sort of comparison, that between the prohibitory status quo supplemented with nudges, and a legalization regime also incorporating nudges. Does the potential for beneficial nudging improve the relative case for drug legalization, or does it offer a better style of prohibition that would capture some of the benefits of a more liberalized regime, while skirting the risks of legalization? 

In addressing this question, this paper first identifies nudge-supplemented drug regulatory regimes within both the prohibitory status quo and a reasonable legal alternative. Within a regime of prohibition, appropriate nudges might be able to improve the uptake of treatment, or to enhance compliance with a harm reduction regimen, for instance. In a legal drug control system, nudges can be used to capture some of the benefits that prohibition might bring in terms of dissuading imprudent drug consumption, while securing those benefits without threatening drug users with criminal penalties. Comparisons between the likely consequences of the nudge-enhanced alternatives will then be made. Evidence for likely consequences can to some extent be drawn from existing drug policy regimes: state-level legalizations of cannabis in the past decade provide evidence for the value of some nudges within a legal regime, for instance, while the states that have not legalized also offer various models for nudging under prohibition. Decriminalization regimes, as in Portugal or Oregon, present a further intermediate case, one where the demand side for drugs (including cannabis but also “harder” drugs) is more-or-less legal while the supply side remains under a strict prohibition. 

OK, this is more a general plan of attack than it is an abstract, but it is what we have now. Onto Draft 1!

Paper on Nudging Illegal and Legal Drug Use

In about a month I must produce a paper on drugs and nudges. I can't really start today, alas. But I must finish in a month. I will track the process (and, I note aspirationally, post the drafts) here.

Long-Delayed Update on the Russian Vice Policy Paper...

 ...provided in a search for closure so that the next pressing project can come to the pages on Five Drafts.

I am happy to report that the published version is available in Policy Sciences. Rush to the link to be the first on your block to access this shiny newish article!

For more on what I have been up to, please see this nDrafts post. 

Russian Vice Policy Schedule

The working title of the Russian vice policy paper is "Vice Policy in Russia: Alcohol, Tobacco, Gambling"; my goal is to have a first draft complete (and posted here) by September 15, 2016. The deadline for the second draft is October 9, 2016, and the third and final (?) draft is slated for October 30, 2016. As for reading commitments, maybe a book each on alcohol, tobacco, and gambling? I'll start with alcohol -- perhaps Alcohol: A History, by Rod Phillips?

OK, here we go...

Parthenon Marbles Update [Itself Updated, August 8, 2016]

Although I did not post any drafts, the Parthenon Marbles paper was completed and presented in a timely fashion. My next goal is to revise it and to post the revision to ssrn.com; perhaps I will think about sending it to a journal, too. But let me "commit" to a posting date of February 29, 2016 -- that one seems memorable.

Update, August 8, 2016: OK, the February 29 deadline proved to be not all that committing, even if it is memorable. But the ssrn version has been posted, and is available here. Next up will be a few (five?) drafts of a paper on Russian vice policy...

Second Vice Paper, Regulating Vice, Revisited

Nearly two years ago I posted a draft of the second vice paper, "Regulating Vice". The final version was published some months ago, in Erich Goode, ed, The Handbook of Deviance, Wiley Handbooks in Criminology and Criminal Justice, 2015. A final pre-editing version is now available at ssrn.com.

Next Up: The Parthenon Marbles in the British Museum

Though kidneys, vice, and Law and Economics are not exactly behind me, the next public commitment is to produce a paper on the Parthenon Marbles in the British Museum. I aim to have the final draft done by September 15, 2015. The topic received some attention in my Law and Economics book, and I want to expand upon it. So, the first draft I am scheduling for July 15, 2015, and the second draft for August 31, 2015. That's all, two drafts and a "final" version. I am becoming more economical with drafts, and might even move to an all-volunteer system eventually -- I hear that such systems are more efficient than relying upon a draft.

That Third Vice Paper

Perhaps my draft schedule ended up not being a precise reflection of reality, but the third vice paper was completed and presented. The title is "Robust Alcohol Policy in Russia: Some Aspirational Measures;" rush to download it at ssrn.com by clicking here.

Here's the abstract:

Alcohol consumption is associated with severe externalities as well as negative effects suffered by drinkers themselves. The usual economics prescription for promoting social well-being in the face of externalities is to apply regulations, including taxes, to force decision makers to confront the full social costs of their choices. Self-harms suffered by rational and informed adult alcohol drinkers, alternatively, offer little rationale (by the lights of traditional economics) for coercive policies aimed at stemming alcohol consumption.

The inherent unknowability of the extent of rationality in drinking decisions suggests that the “first best” policy of leaving rational drinking unfettered, while attempting to adjust potentially irrational choices, is not available in practice. The contention of this paper is that a second-best approach should be robust, in the sense that the policy regime will work fairly well when drinkers are fully rational, and also will do a creditable job of serving social well-being when alcohol-related choices are marked by substantial rationality shortfalls. In the case of the Russian Federation, some policies that mark rather severe departures from the current alcohol system, but are consistent with robustness, include: voluntary self-exclusion from either alcohol purchases or consumption; mandatory exclusion for those who produce external alcohol-related harms; and, a buyer licensing scheme that relies on a “double default” system to reduce both alcohol prevalence and the harms that stem from the drinking that does take place. This paper explicates these “aspirational” alcohol control policies.

Third Vice Paper!

OK, if  things go according to plan, I will be presenting a vice policy paper in May, 2015, so I have to start writing one. Here are my first two self-imposed deadlines:

(1) Short Description of Paper: Wednesday, January 14, 2015
(2) Draft One: Wednesday, February 18, 2015.

Off we go.....

Kidney Update

The (second) kidney paper was written and presented, has been revised, and needs to be revised some more. My goal is to finish the revisions by the end of January and to post the resulting paper on SSRN. Then we will think about potential publishing outlets. Incidentally, the first kidney paper is now published. So, that is the kidney plan for the nonce: revised version, not too embarrassing, due on January 31.

I should report that I have yet to tackle the book I mentioned in the previous post, Sex Cells: The Medical Market for Eggs and Sperm, by Rene Almeling. I don't think that I will be able to get to it in the next few months, alas.

Kidney Failure

Oh no, my deadlines have come and gone. Work on the kidney transplant paper has been minimal. I did make progress on my larger project, however, so I won't claim that all has been unproductive. It does mean that I am well behind on the kidney paper, though. I'd like to have a very rough draft in  a few days.

One goal I did reach was to finish reading The Kidney Sellers, by Sigrid Fry-Revere, on the Iranian system(s) of compensated donations. I learned a heap from this fine book. My next reading goal is to take on Sex Cells: The Medical Market for Eggs and Sperm, by Rene Almeling, but I will need a few weeks for this one, I think.

The Next Challenge

From Vice to Kidneys. The Five Drafts commitment device, which more-or-less has succeeded for two vice papers, is now being repositioned for a paper offering a behavioral economics take on compensated live kidney donations. One complication/improvement is that this paper involves a mystery co-author, who will be revealed at a later date!

We seem to be having fewer and fewer drafts.....hmmm. Anyway, I am calling for three drafts for this paper, at least for the version that is scheduled to be presented at a conference. Here's the schedule:

Draft One: Saturday, August 2, 2014
Draft Two: Wednesday, August 20, 2014
Draft Three: Wednesday, September 3, 2014.

The main confounding factor is the looming deadline for my larger project. Oh, but I do want to make a kidney reading commitment. I hope, within one week, to complete reading the very interesting book, The Kidney Sellers, by Sigrid Fry-Revere, concerning the Iranian system(s) of compensated donations; it's been a treat so far.

Here's the current abstract:

Healthy adults are allowed, and even encouraged, to donate a kidney to patients in dire need of a functional kidney. The encouragement can take various forms, but under US law (and under the laws of most other jurisdictions), a kidney donor cannot receive any “valuable consideration.” The standard contention that informed, rational, voluntary exchange between adults is mutually (and, absent negative externalities) socially beneficial does not carry the day with respect to current public policy towards compensated kidney donations.

Arguments in support of the ban, then, tend to focus on the extent to which a compensated kidney transfer is informed and voluntary and rational, and on the possibility of negative externalities. Those externalities might be of an abstract nature, such as a view that organ sales are repugnant (Roth, 2007). The wide support that uncompensated kidney donation receives, however, suggests that considerations of coercion, poor information, departures from rationality, and negative externalities are perceived as being more potent in the realm of organ transactions when valuable consideration is added into the mix.

Departures from rationality in individual decision making are the central focus of behavioral economics, and hence behavioral economics has direct applicability to the debate on compensated organ donations. In Beard and Leitzel (2013), we briefly discussed some behavioral influences – risk misperceptions, loss aversion, the endowment effect, and present bias – on the decision to donate a kidney. The goal here is to broaden and deepen that analysis, and to go beyond donors to look at behavioral influences on four other sets of actors: patients and potential patients, family members of patients, organ procurement agents, and physicians and other medical personnel. How does the addition of valuable compensation to organ donors influence the rationality of the decisionmaking of all actors involved in transplants? How can a compensated system be designed to address the concerns that are heightened with respect to kidney sales as opposed to uncompensated donations?

Update on the Four Drafts Paper

Back in early April we posted Draft 3.5a of the handbook chapter on vice regulation. Just wanted to indicate what happened from that point. First, a version nearly identical to Draft 3.5a was sent to the editor of the volume at about the same time that the draft was posted here. A mildly updated version was sent a few weeks later, and that is where things now stand. The editor's initial reaction was rather favorable, so if all goes well, the revisions for the published version will be minimal -- I'll let the devoted Five Drafts reader know about any new developments. But now, I need to set some draft deadlines for another paper....

Draft 3.5(a), Composite

Draft 3.5(a) of Regulating Vice

1.Vice

2. Why Regulate Vice?

3. Surveying the Range of Controls
          First half
          Second half

4. One Guiding Principle for Vice Regulation

5. Robustly Regulating Casino Gambling

6. Changing Times

7. Vice 3.0

References

Draft 3.5(a), References

References

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Cook, Philip J., and Michael J. Moore, “The Economics of Alcohol Abuse and Alcohol-Control Policies.” Health Affairs 21(2): 120-133, 2002.

Carpenter, Christopher, and Carlos Dobkin, “The Minimum Legal Drinking Age and Public Health.” Journal of Economic Perspectives 25(2): 133-156, 2011.

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