Home Equity Lending or Operant Conditioning (HELOC)

Operant conditioning is the modification of behavior [e.g., debt extraction] brought about over time by the consequences of said behavior [spending, admiration by your friends and relatives]. Operant conditioning is distinguished from Pavlovian conditioning in that operant conditioning deals with voluntary behavior [e.g., taking out a HELOC] explained by its consequences [e.g., accolades, Hummers, plasma TVs, etc.], while Pavlovian conditioning deals with involuntary behavior triggered by its antecedents.

Operant conditioning, sometimes called instrumental conditioning or instrumental learning, was first extensively studied by Edward L. Thorndike (1874-1949), who observed the behavior of [people] trying to escape from [the box of not being perceived as wealthy]. When first constrained in the boxes, the [people] took a long time to escape. With experience, less effective responses [e.g., actual work, saving, delayed gratification] occurred less frequently and more successful responses [e.g., borrowing money, instant gratification, short-sightedness] occurred more frequently, enabling the [people] to escape in less time over successive trials. In his Law of Effect, Thorndike theorized that successful responses, those producing satisfying consequences [e.g., spending, praise], were "stamped in" by the experience and thus occurred more frequently. Unsuccessful responses, those producing annoying consequences [e.g., having to save for retirement or for a downpayment], were stamped out and subsequently occurred less frequently. In short, some consequences strengthened behavior and some consequences weakened behavior. B.F. Skinner (1904-1990) built upon Thorndike's ideas to construct a more detailed theory of operant conditioning based on reinforcement and punishment.

Reinforcement and punishment, the core ideas of operant conditioning, are either positive (adding a stimulus to an organism's environment [e.g., easy credit]), or negative (removing a stimulus from an organism's environment [e.g., you need more than a pulse to get credit]). This creates a total of four basic consequences, with the addition of no consequence (i.e. nothing happens). It's important to note that organisms are not reinforced or punished; behavior is reinforced or punished.

- Reinforcement is a consequence that causes a behavior to occur with greater frequency [e.g., if you take out a HELOC you have more money to spend, score with the ladies, can go on a fancy vacation, get accolades from friends and relatives].

- Punishment is a consequence that causes a behavior to occur with less frequency [e.g., you have to pay it back]. According to Skinner's theory of operant conditioning, there are two methods of decreasing a behavior or response. These can be by punishment or extinction.

Four contexts of operant conditioning: Here the terms "positive" and "negative" are not used in their popular sense [i.e., "good" and "bad"], but rather: "positive" refers to addition [e.g., receiving cash, praise], and "negative" refers to subtraction [e.g., not receiving cash, praise]. What is added or subtracted may be either reinforcement or punishment. Hence positive punishment is sometimes a confusing term, as it denotes the addition of punishment (such as spanking or an electric shock [or debtor's prison]), a context that may seem very negative in the lay sense.

The four situations are:

1. Positive reinforcement occurs when a behavior (response, [taking out a HELOC]) is followed by an appetitive (commonly seen as pleasant) stimulus [impressing your friends and relatives because no one but your lender has to know where the money really came from] that increases that behavior. In the Skinner box experiment, a stimulus such as [praise] is present when the [person] [takes out a HELOC].

2. Negative reinforcement occurs when a behavior (response, [taking out a HELOC]) is followed by the removal of an aversive (commonly seen as unpleasant) stimulus [disrespect from your friends and relatives because you are not successful] thereby increasing that behavior [taking out a HELOC]. In the Skinner box experiment, negative reinforcement is a loud noise [no more "you're a loser"] continuously sounding inside the [person's] [life] until [he] [takes out a HELOC], when the noise ceases.

3. Positive punishment occurs when a behavior (response) [being prudent, saving, and not taking out a HELOC] is followed by an aversive stimulus, such as introducing a shock or loud noise [e.g., or condemnation from friends or relatives, everyone else is doing it, everyone else can afford that Hummer or fancy vacation], resulting in a decrease in that behavior [e.g., saving].

4. Negative punishment occurs when a behavior (response, [taking out a HELOC]) is followed by the removal of an appetitive stimulus [e.g., easy credit, keeping your home], resulting in a decrease in that behavior [taking out a HELOC].

Also:

- A type of learning in which a certain behavior (usually negative) is not done in an attempt to not receive a punishment is termed avoidance learning.

- Extinction is a related term that occurs when a behavior (response, [taking out a HELOC]) that had previously been reinforced is no longer effective [e.g., interest rates went up, you house went down in value, etc.].

See also:

Skinner's utopian society