Saturday, November 19, 2011

Blind to the Downside

One theory of rational suicide (see The Mathematics of Misery and What Kind of Evidence for Effective Suicidality?") posits that a significant proportion of people - much greater than the proportion of people who actually commit suicide - act as if their lives are not valuable to them. They engage in "actuarially unfair" gambles in which the downside is not adequately compensated by the expected benefit.

One interpretation of those accepting actuarially unfair gambles with significant risks is that they ignore the downside because they secretly plan to commit suicide (limiting the harmful effects of the downside) if the gamble doesn't pay off. This would indicate that they assign low value to continuing to live, which contradicts the popular notion that everyone is very glad to be alive and wants to live as long as possible.

This model applies not only to serious gambles with significant downsides as well as significant, potentially permanent upsides (suicide gambles, like joining a street gang or going to law school), but also applies on a smaller scale to measures that temporarily reduce the pain experienced by the actor, though with potential future costs (palliation, like smoking cigarettes or playing World of Warcraft). Palliative remedies may have significant present and future costs, but at least they are generally effective at alleviating pain temporarily.

However, looking around at the transactions taking place in the world economy, one cannot help but notice the market share of bullshit. Huge numbers of consumers prove willing to spend money on products and services that measurably don't do what they promise to do. These products and services may or may not be particularly harmful, but they all have monetary cost, and they all have a very low likelihood of solving the problem they purport to solve. The market in expensive placebos is massive.

Here are exemplary lists of both Palliation phenomena and Expensive Placebo phenomena, so that the reader will have a better idea of what I'm talking about:

Palliation Expensive Placebo
Budweiser Chelada weight loss potion
heroin face de-wrinkling potion
World of Warcraft breast augmentation potion
cigarettes penis growth and erection potion
the McRib multi-level marketing wealth potion
7th Heaven psychic services
lactation porn Jesus
video poker nice Russian women looking for a good husband who need your credit card number

In both cases, consumers seem blind to the downside. In the Palliation case, there is a significant downside, but it's made up for by the reliable temporary relief from pain. In the Expensive Placebo case, the downside is limited to the cost of the product or service, but the upside is measurably nil.

The line between Palliation and Expensive Placebo may be fuzzy; for instance, a lonely person may get real social pleasure from interacting with a psychic consultant (and effective scammers, like all salesmen, tend to be pleasant people). And alcohol advertisement often includes implicit promises of social belonging, which if interpreted literally would make it more of an Expensive Placebo Belonging Serum than a genuine palliation tool. But the distinguishing characteristic is that in the case of what I call Expensive Placebo, the benefit that is bargained for is wholly imaginary, whereas with Palliation, the essence of the promised benefit is, in fact, provided.

Since the value of Expensive Placebos arises from pure fiction, ordinary measures of quality are not available; if acknowledged and utilized, real measures of quality would destroy the entire market. From this, we can distinguish Expensive Placebos from Palliation in terms of the effect of price.

The price of an Expensive Placebo is a measure of social proof it carries - a more expensive placebo gets you better fantasies. A $2 penis enlargement pill probably doesn't work, but one that costs $2000 is a much more effective fantasy projection device. Price has to take on more epistemic weight in the evaluation of Expensive Placebos, because no other indicia of reliability are relevant. This is so because every indication of reliability, except price, would show the value to be zero. In order to maintain the fantasy, we must look at price instead of real quality indicators. To the degree that an intervention is Palliation, consumers would seek out the most palliation for the cost - these are ordinary goods where price is negatively correlated with demand. But to the degree that an intervention is an Expensive Placebo, price should behave much more weirdly, perhaps even correlating positively with demand, as with Veblen goods. It's not just that the consumer of an Expensive Placebo makes himself blind to the downside of the purchase. The downside becomes the upside. (I describe a similar phenomenon here, in which parents report getting more meaning and joy from child-rearing activities, and plan to spend more time with their children over a coming weekend, when they are reminded of the downside, but not the upside, of having kids.)

There are some things that people will pay for even an imaginary chance at having. Youth, love, sex, wealth, and status are so deeply and painfully desired that people are willing to suspend their disbelief for the privilege of imagining that they might get them. The need for social belonging trumps all other needs, and even trumps our own rationality. Being old, fat, poor, or impotent means being in social pain. Just as the desperate, terminally ill cancer patient often turns to expensive placebos for an imaginary chance at more life, desperate, terminally alive sad people turn to expensive placebos for a chance to imagine a decent life.


  1. I added the stuff about price effects after the original draft.

  2. What about people who are absorbed into religion for what it seems to be adapted for ( --such as promotion of self-regulation and fulfillment of need to belong, if not other functions?) Hard to see why we should begrudge the pious their false beliefs, or try to disabuse them, given the enormity of palliative accomplishments with which they seem to be entwined. Strikes me as suspiciously optimistic to think otherwise.

  3. I am absolutely fine with people buying expensive placebos - Jesus or otherwise. It does seem that they reduce suffering.

    This is not an attack on people who use expensive placebos. We all do it, to some degree, and it may even relieve our suffering a bit. My main point is that the popularity of expensive placebos can be seen as evidence that the world as it is isn't very good for us.

    The price we pay for expensive placebos is essentially a measure of how much of our resources in this world we'd spend to live in a different world. The higher that is, the more it shows this world isn't very good or valuable to us.

  4. An expensive placebo is like a very risky ticket out of East Germany c. 1970. The higher the cost and the lower the apparent chance of escape, the more evidence of how shitty the situation is.

    1. Or maybe palliation and "life" are the same thing. Is an empty lake still a lake?

  5. I once tried to consume an entire can of Clamato once (with another beer on hand between sips to cleanse my palate), but I just wasn't up to it. And I've consumed over two dozen raw eggs in one sitting.

  6. And I've consumed over two dozen raw eggs in one sitting.


  7. "...something else is hurting you -- that's why you need pot or whiskey, or whips and rubber suits, or screaming music turned so fucking loud you can't think. or madhouses or mechanical cunts or 162 baseball games a season. or vietnam or israel or the fear of spiders."

    -Charles Bukowski

  8. "WTF"
    What's more, I was completely sober at the time.

  9. Did you even think of the chicken??


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