Addiction and Cue-Conditioned Cognitive Processes

B. Douglas Bernheim () and Antonio Rangel ()

No 9329, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We propose an economic theory of addiction based on the premise that cognitive mechanisms such as attention affect behavior independently of preferences. We argue that the theory is consistent with foundational evidence (e.g. from neurosciencee and psychology) concerning the nature of decision-making and addiction. The model is analytically tractable, and it accounts for a broad range of stylized facts concerning addiction. It also generates a plausible qualitative mapping from the characteristics of substances into consumption patterns, thereby providing a basis for empirical tests. Finally, the theory provides a clear standard for evaluating social welfare, and it has a number of striking policy implications.

JEL-codes: D0 D1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-hea
Date: 2002-11
Note: HE
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Working Paper: Addiction and Cue-Conditioned Cognitive Processes (2003)
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