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Do Addicts Behave Rationally?

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  • Fehr, Ernst
  • Zych, Peter K

Abstract

The theory of rational addiction assumes that addicts' behavior is fully rational. Common sense and psychological introspection suggest, however, that addictive behavior is irrational. Without knowledge of the addicts' preferences this dispute cannot be resolved. This paper reports the results of an experiment in which addictive preferences were induced. It turns out that 'addicts' consume systematically too much compared to the optimal consumption decision. The authors explain this systematic excess consumption in terms of the psychologically salient features of addictive goods. Copyright 1998 by The editors of the Scandinavian Journal of Economics.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 100 (1998)
Issue (Month): 3 (September)
Pages: 643-62

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Handle: RePEc:bla:scandj:v:100:y:1998:i:3:p:643-62

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  1. George Loewenstein & Richard H Thaler, 2003. "Anomalies: Intertemporal Choice," Levine's Working Paper Archive 618897000000000784, David K. Levine.
  2. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
  3. Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.
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Cited by:
  1. Smith, Trenton G. & Tasnadi, Attila, 2005. "A Theory of Natural Addiction," 2005 Annual meeting, July 24-27, Providence, RI 19195, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Lei, V. & Noussair, C., 2000. "An Experimental Test of an Optimal Growth Model," Purdue University Economics Working Papers 1131, Purdue University, Department of Economics.
  3. Blondel, Serge & Loheac, Youenn & Rinaudo, Stephane, 2007. "Rationality and drug use: An experimental approach," Journal of Health Economics, Elsevier, vol. 26(3), pages 643-658, May.
  4. Clark, Andrew & Etile, Fabrice, 2002. "Do health changes affect smoking? Evidence from British panel data," Journal of Health Economics, Elsevier, vol. 21(4), pages 533-562, July.
  5. Takanori Ida, 2012. "Impatience and Immediacy: A Quasi-Hyperbolic Discounting Approach to Smoking Behavior," Discussion papers e-11-010, Graduate School of Economics Project Center, Kyoto University.
  6. Klaus Abbink & Heike Hennig-Schmidt, 2006. "Neutral versus loaded instructions in a bribery experiment," Experimental Economics, Springer, vol. 9(2), pages 103-121, June.
  7. Ernst Fehr & Peter K. Zych, . "Intertemporal Choice under Habit Formation," IEW - Working Papers 043, Institute for Empirical Research in Economics - University of Zurich.
  8. Markus Pasche, 2008. "Zum Erklärungsgehalt der verhaltensorientierten Spieltheorie," Jena Research Papers in Business and Economics - Working and Discussion Papers 04/2008, Friedrich-Schiller-University Jena, School of Economics and Business Administration.
  9. John Duffy & Enrica Carbone, 2013. "Lifecycle Consumption Plans, Social Learning and External Habits: Experimental Evidence," Working Papers 513, University of Pittsburgh, Department of Economics, revised Sep 2013.
  10. Grabner, Christian & Hahn, Heiko & Leopold-Wildburger, Ulrike & Pickl, Stefan, 2009. "Analyzing the sustainability of harvesting behavior and the relationship to personality traits in a simulated Lotka-Volterra biotope," European Journal of Operational Research, Elsevier, vol. 193(3), pages 761-767, March.

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