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Addiction and Cue-Conditioned Cognitive Processes

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Author Info
B. Douglas Bernheim
Antonio Rangel

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Abstract

We propose an economic theory of addiction based on the premise that cognitive mechanisms such as attention affect behavior independently of preferences. We argue that the theory is consistent with foundational evidence (e.g. from neurosciencee and psychology) concerning the nature of decision-making and addiction. The model is analytically tractable, and it accounts for a broad range of stylized facts concerning addiction. It also generates a plausible qualitative mapping from the characteristics of substances into consumption patterns, thereby providing a basis for empirical tests. Finally, the theory provides a clear standard for evaluating social welfare, and it has a number of striking policy implications.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9329.

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Date of creation: Nov 2002
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Handle: RePEc:nbr:nberwo:9329

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D0 - Microeconomics - - General
D1 - Microeconomics - - Household Behavior

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. George Loewenstein, Ted O'Donoghue and Matthew Rabin., 2000. "Projection Bias in Predicting Future Utility," Economics Working Papers E00-284, University of California at Berkeley. [Downloadable!]
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  2. Loewenstein, George, 1996. "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 272-292, March. [Downloadable!] (restricted)
  3. Jonathan Gruber & Botond Koszegi, 2000. "Is Addiction "Rational"? Theory and Evidence," NBER Working Papers 7507, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
  5. Miron, Jeffrey A & Zwiebel, Jeffrey, 1995. "The Economic Case against Drug Prohibition," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 175-92, Fall. [Downloadable!] (restricted)
  6. Ted O'Donoghue & Matthew Rabin, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March. [Downloadable!] (restricted)
  7. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November. [Downloadable!] (restricted)
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  8. Frank J. Chaloupka & Kenneth E. Warner, 1999. "The Economics of Smoking," NBER Working Papers 7047, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    • Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627 Elsevier. [Downloadable!] (restricted)
  9. Orphanides, Athanasios & Zervos, David, 1995. "Rational Addiction with Learning and Regret," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 739-58, August. [Downloadable!] (restricted)
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  10. David Laibson, 2001. "A Cue-Theory Of Consumption," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 81-119, February. [Downloadable!] (restricted)
  11. 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. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Rafael López, 2006. "Addiction and Self-Control: An Intrapersonal Game," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE. [Downloadable!]
  2. Carlo Ciccarelli & Luigi Giamboni & Robert J. Waldmann, 2008. "Cigarette Smoking, Pregnancy, Forward Looking Behavior and Dynamic Inconsistency," CEIS Research Paper 132, Tor Vergata University, CEIS, revised 14 Nov 2008. [Downloadable!]
    Other versions:
  3. Trenton G. Smith & Attila Tasnádi, 2005. "A Theory of Natural Addiction," Microeconomics 0503006, EconWPA. [Downloadable!]
    Other versions:
  4. Trenton Smith & Young H. Lee, 2006. "Why are Americans Addicted to Baseball? An Empirical Analysis of Fandom in Korea and the U.S," Working Papers 2006-05, School of Economic Sciences, Washington State University. [Downloadable!]
  5. Kevin X.D. Huang & Zheng Liu & Qi Zhu, 2005. "Temptation and Self-Control: Some Evidence from the Consumer Expenditure Survey," Emory Economics 0507, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  6. Steven M. Suranovic & Robert S. Goldfarb, 2005. "A Behavioral Model of Cyclical Dieting," HEW 0511002, EconWPA. [Downloadable!]
  7. Faruk Gul & Wolfgang Pesendorfer, 2005. "The Case for Mindless Economics," Levine's Working Paper Archive 784828000000000581, David K. Levine. [Downloadable!]
  8. D.Dragone, 2005. "Incoerenza Dinamica ed Autocontrollo: Proposta per un'Analisi Interdisciplinare," Working Papers 549, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  9. Camelia Kuhnen & Brian Knutson, 2005. "The Neural Basis of Financial Risk Taking," Experimental 0509001, EconWPA. [Downloadable!]
  10. Kuhnen, Camelia & Knutson, Brian, 2008. "The Influence of Affect on Beliefs, Preferences and Financial Decisions," MPRA Paper 10410, University Library of Munich, Germany. [Downloadable!]
  11. Ronald B. Davies, 2003. "Mandatory Minimum Sentencing, Drug Purity, and a Test of Rational Drug Use," University of Oregon Economics Department Working Papers 2006-20, University of Oregon Economics Department, revised 10 Jun 2003. [Downloadable!]
  12. John Whalley, 2005. "Rationality, Irrationality and Economic Cognition," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  13. David Backus & Bryan Routledge & Stanley Zin, 2004. "Exotic Preferences for Macroeconomists," NBER Working Papers 10597, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  14. Kevin X. D. Huang & Zheng Liu & Qi Zhu, 2006. "Temptation and self-control: some evidence and applications," Staff Report 367, Federal Reserve Bank of Minneapolis. [Downloadable!]
    Other versions:
  15. repec:bep:eapcon:v:7:y:2007:i:1:p:1523-1523 is not listed on IDEAS
  16. Pirouz, Dante, 2004. "The Neuroscience of Consumer Decision-Making," MPRA Paper 2181, University Library of Munich, Germany, revised 30 Jan 2006. [Downloadable!]
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