Quantity Limits on Addictive Goods

• Tác giả: Eric Gao
• Ngôn ngữ: eng
• Ký hiệu phân loại: 363.29 Other social problems and services
• Thông tin xuất bản: 2024
• Bộ sưu tập: Metadata
• ID: 203494

Tóm tắt

Addiction is a major societal issue leading to billions in healthcare losses per year. Policy makers often introduce ad hoc quantity limits-limits on the consumption or possession of a substance-something which current economic models of addiction have failed to address. This paper enriches Bernheim and Rangel (2004)'s model of addiction driven by cue-triggered decisions by incorporating endogenous choice of how much of the addictive good to consume, instead of just whether or not consumption happens. Stricter quality limits improve welfare as long as they do not preclude the myopically optimal level of consumption.Comment: 21 pages