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

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  • Becchetti, Leonardo
  • Solferino, Nazaria
  • Tessitore, M. Elisabetta

Abstract

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.

Suggested Citation

  • Becchetti, Leonardo & Solferino, Nazaria & Tessitore, M. Elisabetta, 2016. "A dynamic model of Gambling addiction with social costs: theory and policy solutions," MPRA Paper 70597, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:70597
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    References listed on IDEAS

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    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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