A Theory of Natural Addiction
Economic theories of rational addiction aim to describe consumer behavior in the presence of habit-forming goods. We provide a biological foundation for this body of work by formally specifying conditions under which it is optimal to form a habit. We demonstrate the empirical validity of our thesis with an in-depth review and synthesis of the biomedical literature concerning the action of opiates in the mammalian brain and their effects on behavior. Our results lend credence to many of the unconventional behavioral assumptions employed by theories of rational addiction, including adjacent complementarity and the importance of cues, attention, and self-control in determining the behavior of addicts. Our approach suggests, however, that addiction is "harmful" only when the addict fails to implement the optimal solution. We offer evidence for the special case of the opiates that harmful addiction is the manifestation of a mismatch between behavioral algorithms encoded in the human genome and the expanded menu of choicesgenerated for example, by advances in drug delivery technology faced by consumers in the modern world.
|Date of creation:||2005|
|Date of revision:|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
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.:
- Laibson, David I., 2000.
"A Cue-Theory of Consumption,"
4481496, Harvard University Department of Economics.
- Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 375-406.
- Hirshleifer, Jack, 1977.
"Economics from a Biological Viewpoint,"
Journal of Law and Economics,
University of Chicago Press, vol. 20(1), pages 1-52, April.
- Fehr, Ernst & Zych, Peter K, 1998.
" Do Addicts Behave Rationally?,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 100(3), pages 643-62, September.
- Hirshleifer, Jack, 1985. "The Expanding Domain of Economics," American Economic Review, American Economic Association, vol. 75(6), pages 53-68, December.
- 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.
- Rogers, Alan R, 1994. "Evolution of Time Preference by Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 460-81, June.
- Oâ€™Donoghue, Ted & Rabin, Matthew, 2002.
"Addiction and Present-Biased Preferences,"
Department of Economics, Working Paper Series
qt3v86x53j, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Trenton G. Smith, 2004.
"The McDonald’s Equilibrium. Advertising, empty calories, and the endogenous determination of dietary preferences,"
Social Choice and Welfare,
Springer;The Society for Social Choice and Welfare, vol. 23(3), pages 383-413, December.
- Smith, Trenton G, 2002. "The McDonald's Equilibrium: Advertising, Empty Calories, and the Endogenous Determination of Dietary Preferences," University of California at Santa Barbara, Economics Working Paper Series qt0hx9x4jr, Department of Economics, UC Santa Barbara.
- 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.
- Larry Samuelson, 2004. "Information-Based Relative Consumption Effects," Econometrica, Econometric Society, vol. 72(1), pages 93-118, 01.
- Ted Bergstrom, 1995.
"Economic in a Family Way,"
_028, University of Michigan, Department of Economics.
- Laibson, David I., 1997.
"Golden Eggs and Hyperbolic Discounting,"
4481499, Harvard University Department of Economics.
- 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.
- Smith, Trenton G, 2002. "Obesity and Nature's Thumbprint: How Modern Waistlines Can Inform Economic Theory," University of California at Santa Barbara, Economics Working Paper Series qt31g1m028, Department of Economics, UC Santa Barbara.
- W. Pesendorfer & F. Gul, 1999.
"Temptation and Self-Control,"
Princeton Economic Theory Papers
99f1, Economics Department, Princeton University.
- B. Douglas Bernheim & Antonio Rangel, 2002.
"Addiction and Cue-Conditioned Cognitive Processes,"
NBER Working Papers
9329, National Bureau of Economic Research, Inc.
- Ainslie, George, 1991. "Derivation of "Rational" Economic Behavior from Hyperbolic Discount Curves," American Economic Review, American Economic Association, vol. 81(2), pages 334-40, May.
- Loewenstein, George, 1996. "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 272-292, March.
- 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.
- Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1261-1303.
- Orphanides, Athanasios & Zervos, David, 1998. "Myopia and Addictive Behaviour," Economic Journal, Royal Economic Society, vol. 108(446), pages 75-91, January.
- Bergstrom, T., 1995.
"Economics of a Family Way,"
95-07, Michigan - Center for Research on Economic & Social Theory.
- Arthur J. Robson, 2001. "The Biological Basis of Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 11-33, March.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea05:19195. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.