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A dynamic model of Gambling addiction with social costs: theory and policy solutions

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We investigate the effects of gambling addiction in a dynamic model in which wellbeing crucially depends on the accumulation of relational goods which is weakened by the consumption of gambling. We outline conditions under which gambling may become addictive leading to a suboptimal equilibrium from a social point of view. We examine the relative effectiveness of different policy solutions (tax on gambling, gambling restrictions) in bridging the distance between the equilibrium without intervention and social optimum.

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  • Becchetti, Leonardo & Solferino, Nazaria & Tessitore, Maria Elisabetta, 2014. "A dynamic model of Gambling addiction with social costs: theory and policy solutions," AICCON Working Papers 133-2014, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    • Handle: RePEc:ris:aiccon:2014_133
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    More about this item

    Keywords

    addiction; gambling; social costs;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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