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In the 1970s a great new use for the rubber band was discovered: self-administered aversion therapy. It didn't go so well in some cases, like for "obsessoinal thinking", the outcome being the opposite of the one intended.

The first paper discusses two cases: one of hair-pulling (trichotillomania) and one of... homosexual ideation. Initial success but relapse and discontinued treatment are reported in the first case (hair pulling), but claimed "cure" in the second case. The second paper (with two negative results) discusses a case of paranoid schizophrenia and one of sexual fantasies including cheating on spouse and homosexual acts. I think most mental health professionals today would see these cases (except the hair pulling case perhaps) as inappropriate for aversion therapy, and some for any therapy (homosexual fantasies in particular).

Did self-administered aversion therapy (with rubber band or otherwise) prove ineffective in general? Or did it find some niche where it is considered successful nowadays?

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Out of the basically four possible ways to change behaviors, your rubber band lies at one extreme, being an example of positive punishment, which works by presenting an aversive stimulus after an undesired behavior is exhibited, making the behavior less likely to happen in the future.

There is also the lesser negative punishment when a certain reinforcing stimulus is removed after a particular undesired behavior is exhibited.

Further, there is positive reinforcement, which works by presenting a motivating stimulus to a person after a desired behavior is exhibited, and negative reinforcement where usually an aversive stimulus is removed after a particular behavior is exhibited.

Now all three alternatives are less extreme than your example and, anecdotally, I do see a tendency toward a more positive approach in efforts to change behaviors, for example in parenting (i.e. reward rather than punishment). Less anecdotally, according to wikipedia, punishment indeed seems to be used reservedly in psychotherapy nowadays and is mostly reserved to the more extreme cases to reduce outright dangerous behaviors such as head banging or biting.

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