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Economic Behavior under the Influence of Alcohol: An Experiment on Time Preferences, Risk-Taking, and Altruism

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  • Luca Corazzini
  • Antonio Filippin
  • Paolo Vanin

Abstract

We report results from an incentivized laboratory experiment undertaken with the purpose of providing controlled evidence on the causal effects of alcohol consumption on risk-taking, time preferences and altruism. Our design disentangles the pharmacological effects of alcohol intoxication from those mediated by expectations, as we compare the behavior of three groups of subjects: those who participated in an experiment with no reference to alcohol, those who were exposed to the possibility of consuming alcohol but were given a placebo and those who effectively consumed alcohol. All subjects participated in a series of economic tasks administered in the same sequence across treatments. After controlling for both the willingness to pay for an object and the potential misperception of probabilities as elicited in the experiment, we detect no effect of alcohol in depleting subjects’ risk tolerance. However, we find that alcohol intoxication increases impatience and makes subjects less altruistic.

Suggested Citation

  • Luca Corazzini & Antonio Filippin & Paolo Vanin, 2015. "Economic Behavior under the Influence of Alcohol: An Experiment on Time Preferences, Risk-Taking, and Altruism," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-25, April.
    • Handle: RePEc:plo:pone00:0121530
    DOI: 10.1371/journal.pone.0121530
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    3. Long, Iain W & Matthews, Kent & Sivarajasingam, Vaseekaran, 2022. "Overconfidence, Alcohol and the Environment: Evidence from a Lab-in-the-Field Experiment," Cardiff Economics Working Papers E2022/6, Cardiff University, Cardiff Business School, Economics Section.
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    5. 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.
    6. Klajdi Bregu & Cary Deck & Lindsay Ham & Salar Jahedi, 2017. "The Effects of Alcohol Use on Economic Decision Making," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 886-902, April.
    7. 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.
    8. 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.
    9. Khandeparkar, Kapil & Motiani, Manoj, 2020. "The effect of alcohol consumption and contextual cues on the evaluation of new brands of alcoholic beverages at the POS," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    10. 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.
    11. 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.
    12. Au, Pak Hung & Zhang, Jipeng, 2016. "Deal or no deal? The effect of alcohol drinking on bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 127(C), pages 70-86.
    13. David Fielding & Stephen Knowles & Kirsten Robertson, 2017. "Alcohol Expenditure, Generosity and Empathy," Working Papers 1711, University of Otago, Department of Economics, revised Dec 2017.
    14. David Fielding & Stephen Knowles & Kirsten Robertson, 2017. "When does it matter how you ask? Cross-subject heterogeneity in framing effects in a charitable donation experiment," Working Papers 1701, University of Otago, Department of Economics, revised Jan 2017.
    15. Long, Iain W & Matthews, Kent & Sivarajasingam, Vaseekaran, 2019. "Behavioural Change and Alcohol-Fuelled Violence: A Field Experiment," Cardiff Economics Working Papers E2019/9, Cardiff University, Cardiff Business School, Economics Section.

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