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

Author

Listed:
  • Leonardo Becchetti

    (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)

  • Nazaria Solferino

    (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)

  • Maria Elisabetta Tessitore

    (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)

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

  • Leonardo Becchetti & Nazaria Solferino & Maria Elisabetta Tessitore, 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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    References listed on IDEAS

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    Keywords

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    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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