Would a Rational Lucy Take Off without Assessing the Probability of a Crash Landing?
A random life expectancy and a positive relationship between the probability of dying and the degree of addiction are incorporated into a rational addiction model. The Becker-Murphy equality between the addictive commodity's full price and marginal utility is modified by discounting the market price and marginal utility of the addictive commodity by the probability of survival. The individual's negative appreciation of the addictive stock is reinforced by the diminishing survival prospects. The rate of change of the consumption of the addictive commodity is lower than that obtained when the effect of addiction on the probability of dying is ignored.
Volume (Year): 26 (2000)
Issue (Month): 4 (Fall)
|Contact details of provider:|| Postal: |
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
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.:
- Grossman, Michael & Chaloupka, Frank J & Sirtalan, Ismail, 1998.
"An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels,"
Western Economic Association International, vol. 36(1), pages 39-48, January.
- Michael Grossman & Frank J. Chaloupka & Ismail Sirtalan, 1995. "An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels," NBER Working Papers 5200, National Bureau of Economic Research, Inc.
- repec:ltr:wpaper:1994.21 is not listed on IDEAS
- Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1990.
"An Empirical Analysis of Cigarette Addiction,"
NBER Working Papers
3322, National Bureau of Economic Research, Inc.
- Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1990. "An Empirical Analysis of Cigarette Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 61, Chicago - Center for Study of Economy and State.
- 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.
- Chaloupka, Frank, 1991.
"Rational Addictive Behavior and Cigarette Smoking,"
Journal of Political Economy,
University of Chicago Press, vol. 99(4), pages 722-42, August.
- Nilss Olekalns & Peter Bardsley, 1994.
"Rational Addiction to Caffeine: an Analysis of Coffee Consumption,"
1994.21, School of Economics, La Trobe University.
- Olekalns, Nilss & Bardsley, Peter, 1996. "Rational Addiction to Caffeine: An Analysis of Coffee Consumption," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1100-1104, October.
When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:26:y:2000:i:4:p:431-437. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross)
If references are entirely missing, you can add them using this form.