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The Effects of Alcohol Use on Economic Decision Making

Author

Listed:
  • Klajdi Bregu

    (University of Arkansas)

  • Cary Deck

    (University of Arkansas, Chapman University, University of Alaska-Anchorage)

  • Lindsay Ham

    (University of Arkansas)

  • Salar Jahedi

    (RAND Corporation)

Abstract

It is notoriously hard to study the effect of alcohol on decision making, given the selection that takes place in who drinks alcohol and when they choose to do so. In a controlled laboratory experiment, we study the causal effect of alcohol on economic decision making. We examine the impact of alcohol on the following types of tasks: math and logic, uncertainty, overcon dence, strategic games, food choices, anchoring, and altruism. Our results indicate that alcohol consumption, as measured by the blood alcohol concentration (BAC), increases cooperation in strategic settings and altruism in Dictator games. We do not find any effects of alcohol on individual decision making tasks with the exception of anchoring. People with higher BAC did better in the anchoring task. The results suggest that the effects of alcohol are domain specifc.

Suggested Citation

  • Klajdi Bregu & Cary Deck & Lindsay Ham & Salar Jahedi, 2016. "The Effects of Alcohol Use on Economic Decision Making," Working Papers 16-03, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:16-03
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    References listed on IDEAS

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    2. Brañas-Garza, Pablo & Cabrales, Antonio & Mateu, Guillermo & Sánchez, Angel & Sutan, Angela, 2023. "Social interaction and negotiation outcomes: An experimental approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 102(C).
    3. Fielding, David & Knowles, Stephen & Robertson, Kirsten, 2018. "Alcohol, generosity and empathy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 76(C), pages 28-39.
    4. Deck, Cary & Jahedi, Salar & Sheremeta, Roman, 2021. "On the consistency of cognitive load," European Economic Review, Elsevier, vol. 134(C).
    5. Deck, Cary & Pate, Jennifer, 2022. "High time to study the relationship between marijuana use and economic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 1-14.
    6. Giuseppe Attanasi & James C. Cox & Vjollca Sadiraj, 2022. "Festival Games: Inebriated and Sober Altruists," GREDEG Working Papers 2022-39, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    7. Kuhn, Michael A. & Kuhn, Peter & Villeval, Marie Claire, 2017. "Decision-environment effects on intertemporal financial choices: How relevant are resource-depletion models?," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 72-89.
    8. Brañas-Garza, Pablo & Cabrales, Antonio & Mateu, Guillermo & Sanchez, Angel & Sutan, Angela, 2018. "Does pre-play social interaction improve negotiation outcomes?," MPRA Paper 90842, University Library of Munich, Germany.
    9. Daniel Houser & Jianxin Wang, 2021. "Business Drinking: Evidence from A Lab-in-the-Field Experiment," Working Papers 1074, George Mason University, Interdisciplinary Center for Economic Science.
    10. Bregu, Klajdi, 2020. "Overconfidence and (Over)Trading: The Effect of Feedback on Trading Behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 88(C).
    11. Au, Pak Hung & Lim, Wooyoung & Zhang, Jipeng, 2022. "In vino veritas? Communication under the influence—An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 325-340.
    12. Judd B. Kessler & Andrew McClellan & James Nesbit & Andrew Schotter, 2022. "Short-term fluctuations in incidental happiness and economic decision-making: experimental evidence from a sports bar," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 141-169, February.

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    More about this item

    Keywords

    Alcohol; Risk Taking; Overconfidence; Altruism; Behavioral Economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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