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Do Addicts Behave Rationally?[Note 1. This paper was supported by a grant from the ...]
Author(s) -
Fehr Ernst,
Zych Peter K.
Publication year - 1998
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00127
Subject(s) - addiction , irrational number , introspection , consumption (sociology) , economics , salient , psychology , addictive behavior , rationality , positive economics , microeconomics , social psychology , cognitive psychology , sociology , psychiatry , political science , law , social science , geometry , mathematics
The theory of rational addiction assumes that addicts' behavior is fully rational. Common sense and psychological introspection suggest, however, that addictive behavior is irrational. Without knowledge of the addicts' preferences this dispute cannot be resolved. This paper reports the results of an experiment in which addictive preferences were induced. It turns out that ‘addicts’ consume systematically too much compared to the optimal consumption decision. We explain this systematic excess consumption in terms of the psychologically salient features of addictive goods.