In this note we use the Rank-Dependent Expected-Utility (RDEU) model to analyse how the effect of improved information on smoking risks impacts the consumption of cigarettes. The RDEU model enables us to incorporate the ways individuals perceive smoking risks. We provide conditions for individuals to modify cigarette consumption in the face of improved information, and we show that these conditions depend in particular on the probability of being ill.
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Volume (Year): 142 (2006) Issue (Month): II (June) Pages: 223-230 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: D8 - Microeconomics - - Information, Knowledge, and Uncertainty I1 - Health, Education, and Welfare - - Health