Overconsumption and Self-Control: Evidence from Cigarette Purchases 

Ho, H. Job Market Paper.

Using transaction data from over 10,000 cigarette smokers across 121 convenience stores, this study examines how consumers exercise self-control when purchasing harmful goods. My empirical analysis exploits variation in exposure to multi-unit discounts (e.g., "buy 2 get $1 off") to test whether consumers deliberately avoid buying in bulk to limit consumption. I find strong evidence of self-control through multipack avoidance. Many smokers purchase only one pack at a time despite available multipack discounts, and over half of these single-pack purchases are followed by another purchase within two days. This behavior appears specific to cigarettes: smokers who routinely forgo cigarette multipack discounts nevertheless take advantage of multi-unit discounts on beverages at similar rates as others. To test whether buying more cigarettes leads to more smoking, I use an instrumental variable strategy that leverages store-level variations in multipack discounts. I find that purchasing an extra pack causes smokers to return 28% sooner than expected, corresponding to a 16% increase in daily consumption. This result suggests that smokers aware of overconsumption risk have an incentive to avoid multiple packs. I then estimate a mixed-type model that allows consumers to be (i) sophisticated, (ii) partially naive, and (iii) naive about their consumption behavior, and find that roughly 70% of smokers are at least partially aware of their overconsumption risk. Since most smokers exercise some degree of self-control, offering a smaller pack size at a higher per-unit price may help reduce smoking. Policy simulations support this: reintroducing a half-sized pack leads to a 3.6% reduction in consumption, while banning quantity discounts reduces consumption by only less than 1%. These findings highlight how understanding consumer self-control can guide the design of interventions to curb overconsumption in markets for vice goods.

Comparative Messaging and Learning Deterrence: Evidence from Pharmaceutical Drug Detailing 

Ho, H., X. Dong, Y. Xie, P. Chintagunta. R&R at Management Science.

A firm launching a new product in an existing category can leverage comparative messages to inform customers and to distinguish it from competing products. However, incumbents may benefit less from comparative messaging as this could be interpreted as providing legitimacy to the entrant. In this study, based on empirical evidence from a pharmaceutical category where both incumbents and entrants employ comparative (and non-comparative) messages during their detailing visits, we propose that the incumbent utilizes comparative messages to interfere with customers' quality inferences about the new entrants. We develop a learning model that explicitly incorporates such a "leaning deterrence" effect, following the generalized belief updating framework (Bissiri et al. 2016). Estimating the model using a physician panel in a therapeutic category featuring one existing and two new drugs, we find that new entrants benefit from employing comparative detailing (versus non-comparative detailing) primarily due to its superior informative function. More importantly, our results support the presence of a “learning deterrence” effect for the incumbent’s comparative detailing, i.e., receiving a comparative message from the incumbent targeting a new entrant disrupts a physician’s learning process about the quality of that entrant’s brand. Interestingly, we find no evidence of persuasive effects from incumbent’s comparative detailing. Consistent with the FTC's original motivation of allowing comparative advertising, our counterfactual analysis reveals that entrants are worse off in its absence. Furthermore, while comparative advertising lacks the persuasive power of non-comparative advertising, the incumbent still benefits from its ability to deter physicians from learning about the entrants' qualities.

What Can Machine Learning Teach Us about Habit Formation? Evidence from Exercise and Hygiene 

Buyalskaya, A.*, H. Ho*, C. Camerer, X. Li, K. Milkman, A. Duckworth (2023). Proceedings of the National Academy of Sciences.

(*) indicates equal contribution

We apply a machine learning technique to characterize habit formation in two large panel data sets with objective measures of 1) gym attendance (over 12 million observations) and 2) hospital handwashing (over 40 million observations). Our Predicting Context Sensitivity (PCS) approach identifies context variables that best predict behavior for each individual. This approach also creates a time series of overall predictability for each individual. These time series predictability values are used to trace a habit formation curve for each individual, operationalizing the time of habit formation as the asymptotic limit of when behavior becomes highly predictable. Contrary to the popular belief in a “magic number” of days to develop a habit, we find that it typically takes months to form the habit of going to the gym but weeks to develop the habit of handwashing in the hospital. Furthermore, we find that gymgoers who are more predictable are less responsive to an intervention designed to promote more gym attendance, consistent with past experiments showing that habit formation generates insensitivity to reward devaluation. 

A Megastudy of Text-Based Nudges Encouraging Patients to Get Vaccinated at an Upcoming Doctor’s Appointment

Milkman, K., M. Patel,..., H. Ho, et al. (2021). Proceedings of the National Academy of Sciences.

Many Americans fail to get life-saving vaccines each year, and the availability of a vaccine for COVID-19 makes the challenge of encouraging vaccination more urgent than ever. We present a large field experiment (N = 47,306) testing 19 nudges delivered to patients via text message and designed to boost adoption of the influenza vaccine. Our findings suggest that text messages sent prior to a primary care visit can boost vaccination rates by an average of 5%. Overall, interventions performed better when they were 1) framed as reminders to get flu shots that were already reserved for the patient and 2) congruent with the sort of communications patients expected to receive from their healthcare provider (i.e., not surprising, casual, or interactive). The best-performing intervention in our study reminded patients twice to get their flu shot at their upcoming doctor’s appointment and indicated it was reserved for them. This successful script could be used as a template for campaigns to encourage the adoption of life-saving vaccines, including against COVID-19. 

A 680,000-Person Megastudy of Nudges to Encourage Vaccination in Pharmacies

Milkman, K., L. Gandhi,..., H. Ho, et al. (2022). Proceedings of the National Academy of Sciences.

Encouraging vaccination is a pressing policy problem. To assess whether text-based reminders can encourage pharmacy vaccination and what kinds of messages work best, we conducted a megastudy. We randomly assigned 689,693 Walmart pharmacy patients to receive one of 22 different text reminders using a variety of different behavioral science principles to nudge flu vaccination or to a business-as-usual control condition that received no messages. We found that the reminder texts that we tested increased pharmacy vaccination rates by an average of 2.0 percentage points, or 6.8%, over a 3-mo follow-up period. The most-effective messages reminded patients that a flu shot was waiting for them and delivered reminders on multiple days. The top-performing intervention included two texts delivered 3 d apart and communicated to patients that a vaccine was “waiting for you.” Neither experts nor lay people anticipated that this would be the best-performing treatment, underscoring the value of simultaneously testing many different nudges in a highly powered megastudy. 

Heterogeneous Outside Options in Conjoint Analyses