The Economic Approach to Addiction; Why Behavioral Economics is a Pertinent Analytical Framework?

Abstract

This paper sets out to present a better understanding of the economic approach to the analysis of addictive behavior. Addiction, in accordance with the standard definitions, is a consumption behavior, which follows certain behavioral patterns. Based on recent neuroscience researches on addiction, there is now a wide consensus regarding how the consumption of addictive substances affects the neural mechanisms of decision-making. These findings, next to strong supports from psychological patterns of addictive behavior, have led to a better understanding of the nature of addiction. The development of this understanding to required policies in the field of addiction, meets what we expect from the economic approach to the analysis of addictive behavior. By defining welfare criteria for consumers, the application of economic theory in this analysis helps developing policies that are measurable and comparable in terms of achieving their goals. Accordingly, the behavioral economic approach to addictive behavior helps assimilating qualitative concepts and insights of relevant disciplines into a quantitative analytical framework of making decision as to addictive consumption. This is particularly important for generating a more rigorous, and at the same time comprehensive toolkit for making policies that are seeking to reduce the harms of addiction. On this basis, in this paper, we have attempted to explain why behavioral economics is an analytical framework suitable for extracting requisite policy implications in the field of addiction.

Keywords

• behavioral economics
• addiction
• addictive behavior
• rational addiction
• addiction policy
• neuroeconomics