Course Content
Introduction
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Economics for Life

A fundamental tenet of economics is that individuals seek rewards. People do actions and seek to acquire goods and services that give them “utility.” English jurist, philosopher, and social reformer Jeremy Bentham (1748-1832) defined “utility” as “satisfaction.” Bentham was an English jurist, philosopher, and social reformer who invented the philosophy of Utilitarianism. According to Bentham, the fundamental axiom of Utilitarianism is that “it is the greatest happiness of the greatest number that is the measure of right and wrong.” More contemporary economists define utility as “well-being.” The new field of neuro-economics contends that individuals perform actions and seek to acquire goods and services because these activities give individuals a reward of dopamine in the area of the brain known as the ventral tegmental area (Wargo et al, 2010).

In both mice and in humans, habits form by repetition of a certain activity. We do the activity because the dopamine neurons release dopamine, a neurotransmitter, thereby giving us a reward and encouraging us to repeat the action either at the time or later. As we (or the mouse in the maze) repeat the action, it becomes less and less mediated by the ventral tegmental area and more controlled by the basal ganglia, the most primitive part of the brain. Eventually, the basal ganglia takes over the action, and it is no longer mediated by the dopamine reward system. In essence, this is why it is so hard to change a habit, whether it is good or bad. Once an action becomes a habit, it is more closely related to an instinct in an animal than a conscious choice. So, how do we change or extinguish a bad habit? Cassie Shortsleeve, in Time Magazine, reviews the actions that scientists recommend to eliminate a bad habit:

  1. Replace a bad habit with a good one. You must keep repeating the good habit, since a scientific study found that it takes an average of 66 days to form a new habit.
  2. Reduce your stress levels. A lot of bad habits (smoking, sugar drinks) are used to alleviate stress levels because they give a dopamine feel-good high. Do other things to alleviate stress like meditation or a walk
  3. Know the cues that trigger the habitual response, as in having a cigarette after every meal. Try to interrupt the cues.
  4. Create for yourself a better reason for quitting the habit. This means creating intrinsic motivation for yourself, such as reminding yourself that you will be healthier without smoking or overeating.
  5. Set better goals than just reacting to triggers. If you eat a cookie every time you walk in the kitchen, avoid the kitchen in between meals. Like an alcoholic, you want to throw out the liquor and avoid triggers that will remind you of the habit (2018).

We should note, though, that “addiction” is neurologically different from “habit.” All addictive drugs hijack the dopamine system, not the basal ganglia. It is harder to alleviate addiction than it is to break a bad habit. Unfortunately, we do not have the space here to discuss addiction in detail.