Tattoos, options & cognitive biases

A recent post of mine prompts the thought: doesn't the rise of tattooing raise some important economic issues?

What I mean is that we can think of getting a tattoo as an irreversible investment (pdf); removing them is expensive and painful, so in this respect they differ from piercings. And the thing we know about irreversible investments is that the threshold for undertaking them is typically quite high.This is because such investments (sometimes) have an option value - we have the option of exercising them later rather than now - and it often pays to hold onto such options.

This raises the question: why, then, do people want to exercise the option of getting a tattoo, rather than hold onto it?

Two cognitive biases are relevant here. One is the projection bias (pdf) - our tendency to under-estimate the extent to which our tastes will change in future. Just as we will undervalue equity options if we under-estimate future volatility, so we'll undervalue the the option of waiting to get a tattoo if we under-estimate the volatility of our tastes, and thus be more likely to get one now. In this context, a tattoo of one's football team is more rational than one of one's partner - your team is for life but your lover isn't.

The second bias is the present bias - the tendency to underweight the future. The more we discount our future selves - and the possible regret they will feel - the more we're likely to get a tattoo. This has some testable implications:

 - People prone to such bias are more likely to have tattoos. Ceteris paribus, we'd expect people with lots of credit card debt (pdf) to have tattoos, as both are products of present bias.

 - We'd expect criminals to be especially likely to be tattooed, to the extent that committing crime betokens a present bias, a failure to see that one's future self could end up inside.

 - We're more likely to get tattoos if we feel sad, because sadness increases the extent of present bias. Getting inked after splitting up from one's partner should thus be common.

How does all this fit with the fact that the prevalence of tattoos has boomed in recent years? It could be that they are a product of a more egocentric culture - an artefact of neoliberalism? If folk become more egocentric, then we'd expect to see more tattoos to the extent that tattooing priveleges the present self over the future one. It could be, then, that the spread of tattooing is like household debt, "culture wars" over religion or the popularity of radio phone-ins. All are products of the age of ego. 

Another thing: I suspect peer effects also matter here; folk get tattooed if their peers are. This might be why footballers - a group susceptible to peer pressure - are tattooed more than, say, individual sportsmen are.

Comments

[Zorblog]

Here is a sensible post. If irreversible investments are explained by present bias and underestimation of future conditions, there is an obvious parallel between Cheryl Cole's bottom and the adoption of the euro by most EU members 13 years ago.
(If we could see them naked, we might find that the euro is not the only thing that some politicians regret)

[Chris Clark]

Another factor in present bias is the rapid shift in culture across generations brought on by mostly, i think, by media and communication technology. If you expect to behave in your middle/old age in a simlar manner to your parents'/grandparents' generation then you have a clear and constant reminder of your future and small present bias. Not so if you consider yourself a member of Generation X or Generation Y where you not only have no check on present bias but even an incentive to flaunt your present bias.

The gradual atomisation of society has many causes but seems to be the major factor behind tattoos - at least as far as I can see. The replacing of longstanding relationships within relatively closed societies for more transient relationships within more open societies produces a clear incentive to display bold and immediate character statements (eg tattoos) rather than develop a reputation for certain character traits (eg buying your round).

[Tobin Pigou]

Is there a typo here?

- We'd expect criminals to be especially likely to be tattooed, to the extent that committing crime betokens a lack of present bias, a failure to see that one's future self could end up inside.

Isn't failing to see the future self the bias? Ie there's no lack of bias?

Or am I confused?

[chris]

@ Tobin Pigou - yes there was. Ta for spotting it. It's corrected now.

[Jim]

I love tattoos. They point out who to avoid like the plague. That especially goes for all those women who think they're being oh so rebellious by getting little tattoo on their shoulder or ankle (yes that means you, Samantha Cameron).

[Sam]

According to a quick internet search, between 17% and 33% of people who get tattoos regret them later. I suspect that people with credit card debt and criminal records are somewhat more likely to be despondent about their bad decisions.

(17% ) http://www.statisticbrain.com/tattoo-statistics/

(33%) http://www.huffingtonpost.com/2012/07/12/tattoo-regret_n_1654959.html

[Tony Woolf]

The point and the value of tattoos is precisely that they are hard to remove so they show committment. One wouldn't have a tattoo about a one-night stand.
The committment could be to a lover, team or family ("Mother"), but many tattoos are not about any of these but about groups. It might be to groups that identify with particular symbols that could be on the tattoo, or just to groups that wear tattoos in general (tough people that can put up with pain). I would guess that tattoo wearers feel more positive about other tattoo wearers than about the population at large. Belonging to a group can be very valuable, so tattooed people might not be so short-sighted as at first appears.

[charlieman]

@Tony Woolf: "Belonging to a group can be very valuable, so tattooed people might not be so short-sighted as at first appears."

Indeed, in post WWII Germany citizens flashed their swastika and SS tattoos in order to get a job...

Tribal identity is productive within the tribe, but potentially destructive without it.

[john malpas]

way back in the 50s tattoos were often associated with sailors and syphilis.

[Elizabeth Mast]

i have tattoos that represent characteristics that i wish to have. in this case, i am looking into the future. what a better way to remember what i am working forward then to always have a reminder with me?

[jonny bakho]

Guys get them to impress women. Guys want to impress women when they are young and virile, not when they are old and impotent.
Women get tattoos to express faith in their man and expect reciprocity.
Tattoos have far more to do with sex, dating and more immediate gratification than a long term investment.

-jonny bakho

[Kevin Hill]

In my experience with college students, alcohol consumption--perhaps the ultimate cause of present bias--has a lot to do with the decision to get a tattoo.

[Larry]

This is good on the subject of tattoos and regret:
http://blog.ted.com/2011/12/02/dont-regret-regret-kathryn-schulz-on-ted-com/

[Richard Powell]

As far as I am aware, I know just two people with tattoos. Both acquired them following the break-up of a relationship, for therapeutic reasons. Both tattoos are small and symbolically significant and neither is normally on public display. Both seem to have done the job of making the owner feel better.

[Romit]

Much of this theory is based on the assumption that people are making rational cost benefit analysis decisions. From our broader experience of global markets, we know better than to treat that as an axiom. As a commenter alluded earlier, the act of getting a tattoo after a night of drinking will take this discussion beyond the scope of this argument.

[www.czasnagre.com]

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