I am partial to RJ’s Black Soft Licorice. In moderation, like cocaine (I imagine!), it does no harm. But like cocaine (I imagine!), one is tempted to consume it in excess, a bag at a time.

How can I just eat a reasonable amount?  I could joint Licorice Lovers Anonymous (LLA) and complete a ten step program to kick my habit entirely. I am sure there are many fellow sufferers out there, who love RJ’s not too little but too much.   Just a few tweets would allow us to coördinate and set up weekly meetings.  Seems like overkill.  And anyway, I don’t want to kick the habit entirely, just control it.

I see my five-year old wandering around, causing trouble and a simple solution appears magically in my mind.  I ask him to hide the licorice.  He is very good at hiding things that do not belong to him – remote controls, his brother’s toys, my watch etc. etc. He’ll love to hide the licorice.  There are a couple of problems.  It is my intention to ask him to bring the licorice back every day so I can have a few pieces.  But there is s significant chance that he’ll forget where he hid the bag.  So what?  Then, we’ll lose the bag and the licorice. But this is not any worse than the LLA solution of cutting out the addiction completely.

There is a second and quite famous problem from incentive theory: Who will monitor the monitor?  In other words, perhaps your police-kid will eat the licorice himself.  For this problem I have an answer.  My five-year old will consume strawberry Twizzlers by the cartful, but black, spicy licorice, I think not.  I am proved right.  One piece of licorice is chewed but the rest are intact.

Thinking about it, I realize that I have used a variation of an old idea of Oliver Wlliamson’s, “Credible Commitments: Using Hostages to Support Exchange” (jstor gated version). In his analysis, a contracting party A voluntarily hands over an “ugly princess” to party B to give party A the incentive to perform some costly investment.  Party B does not value the princess and hands her over once the investment is sunk.  In my argument, the ugly princess is the licorice and instead of specific investment, I want to commit to avoid over-consumption of an addictive good.

This pretty much gives you principles under which this mechanism works: Consumption of good that is addictive for party A but has no value for party B can be controlled by allowing party B to control the use of the good.  Party A might return the favor for party B (e.g. by rationing computer game time).  Only, my party B would never agree to this voluntarily and would see as a violation of civil liberties rather than as a favor.  This level of addiction I have no solution for….