Working Paper: NBER ID: w25060
Authors: Lars J. Lefgren; Olga B. Stoddard; John E. Stovall
Abstract: We present a theoretical framework which explains the optimizing behavior of individuals who are exposed to many latent stimuli but prone to experience only the most salient one. We show that individuals with such preferences may find it optimal to engage in seemingly dysfunctional behavior such as self-harm. Our model also explains the behavior of individuals experiencing depression or trapped by multiple competing problems. We present experimental evidence suggesting such preferences explain the behavior of more than two thirds of subjects exposed to single and multiple painful stimuli.
Keywords: sensory limitations; self-harm; depression; behavioral economics
JEL Codes: D91; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| emotional suffering (D91) | self-harming behavior (I12) |
| depression (E32) | reduced engagement in enjoyable activities (J22) |
| perception of multiple problems (E66) | inaction (Y70) |