Addiction and Cue-Conditioned Cognitive Processes

58 Pages Posted: 25 Nov 2002 Last revised: 30 Oct 2010

See all articles by B. Douglas Bernheim

B. Douglas Bernheim

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Antonio Rangel

California Institute of Technology

Date Written: November 2002

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.

Suggested Citation

Bernheim, B. Douglas and Rangel, Antonio, Addiction and Cue-Conditioned Cognitive Processes (November 2002). NBER Working Paper No. w9329. Available at SSRN: https://ssrn.com/abstract=351424

B. Douglas Bernheim (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-725-8732 (Phone)
650-725-5702 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Antonio Rangel

California Institute of Technology ( email )

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