Addiction and Present-Biased Preferences

Ted O'Donoghue and Matthew Rabin

Working Papers from Cornell University, Center for Analytic Economics

Abstract: 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 selfcontrol 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.

JEL-codes: A12 B49 D11 D60 D91 (search for similar items in EconPapers)
Date: 2002-07
References: Add references at CitEc
Citations: View citations in EconPapers (26)

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https://scholar.harvard.edu/files/rabin/files/p-bpref.pdf

Related works:
Working Paper: Addiction and Present-Biased Preferences (2003)
Working Paper: Addiction and Present-Biased Preferences (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:corcae:02-10

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