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Do Addicts Behave Rationally?

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Author Info

  • Ernst Fehr

    (University of Zuerich)

  • Peter K. Zych

    (Technical University of Vienna)

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.

(This abstract was borrowed from another version of this item.)

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File URL: http://128.118.178.162/eps/exp/papers/0305/0305002.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Experimental with number 0305002.

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Length: 20 pages
Date of creation: 07 May 2003
Date of revision:
Handle: RePEc:wpa:wuwpex:0305002

Note: Type of Document - pdf; pages: 20 .
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Web page: http://128.118.178.162

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Keywords: Addicts; Rational Behavior;

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References

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  1. George Loewenstein & Richard H Thaler, 2003. "Anomalies: Intertemporal Choice," Levine's Working Paper Archive 618897000000000784, David K. Levine.
  2. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  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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Citations

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Cited by:
  1. Fehr, Ernst & Zych, Peter K., 2008. "Intertemporal Choice under Habit Formation," Handbook of Experimental Economics Results, Elsevier.
  2. Vivian Lei & Charles N. Noussair, 2002. "An Experimental Test of an Optimal Growth Model," American Economic Review, American Economic Association, vol. 92(3), pages 549-570, June.
  3. 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.
  4. Smith, Trenton G. & Tasnadi, Attila, 2007. "A theory of natural addiction," Games and Economic Behavior, Elsevier, vol. 59(2), pages 316-344, May.
  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, 2002. "Neutral versus Loaded Instructions in a Bribery Experiment," Bonn Econ Discussion Papers bgse23_2002, University of Bonn, Germany.
  7. Andrew Clark & Fabrice Etilé, 2001. "Do Health Changes Affect Smoking? Evidence from British Panel Data," DELTA Working Papers 2001-16, DELTA (Ecole normale supérieure).
  8. 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.
  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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