Addiction and The Role of Commitment Devices
This paper studies if external commitment devices are effectively capable of helping agents to reduce their consumption of addictive goods (alcohol, cigarettes, drugs, fatty foods etc.). The main assumption introduced in the model is that individuals are sophisticated hyperbolic discounters. The model shows that making easier the access to such instruments has ambiguous effects on individuals' welfare. First, hyperbolic agents purchase commitment devices less often that they wish to. Second, once the device has been purchased, consumption of addictive goods does not necessarily decrease. In particular, for mild level of addiction, commitment devices effectively reduce consumption and improve health status. However, for severe level of addiction, the consumption of the sin good increases, and the availability of commitment devices worsens the addictive problem. Finally, policy implications are derived.
|Date of creation:||10 Dec 2010|
|Contact details of provider:|| Postal: I-80126 Napoli|
Phone: +39 081 - 675372
Fax: +39 081 - 675372
Web page: http://www.csef.it/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:sef:csefwp:267. 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: (Lia Ambrosio)
If references are entirely missing, you can add them using this form.