Addiction and Present-Biased Preferences
We investigate the role that self-control problems modeled as time-inconsistent, present-biased preferences and a person's awareness of those problems might play in leading people to develop and maintain harmful addictions. Present-biased preferences create a tendency to over-consume addictive products, and awareness of future self-control problems can mitigate or exacerbate this over-consumption, depending on the environment. Our central concern is the welfare consequences of this over-consumption. Our analysis suggests that for realistic environments self-control problems are a plausible source of severely harmful addictions only in conjunction with some unawareness of future self- control problems.
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| Length: | 53 pages |
| Date of creation: | 21 Mar 2003 |
| Date of revision: | |
| Handle: | RePEc:wpa:wuwpga:0303005 |
| Note: | 53 pages, Acrobat .pdf |
| Contact details of provider: | Web page: http://econwpa.repec.org
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