The pervasive use of smartphones has raised concerns about their addictive and maladaptive nature. This paper introduces an intervention based on rational addiction theory to cost-effectively nudge consumers to reduce smartphone usage, promoting sustainable digital consumption. We examine whether pre-announcing future targets to reduce smartphone usage influences current consumption and behavioral change. We develop a mathematical model incorporating habit formation, satiation, and projection bias, and test its predictions in three pre-registered randomized control trials using objectively measured smartphone usage. When future incentives and targets are pre-announced, consumers reduce usage pre-emptively compared to their baseline, consistent with rational addiction. This occurs only when participants are given fixed daily reduction targets, not when incentivized proportionally for reductions over time, and seems to reflect forward-looking habit formation, as other explanations (e.g., goal priming or capability testing) were unlikely to drive results. Interestingly, pre-emptive reductions are stronger among heavy users and those with stronger beliefs in meeting their targets. We also find that pre-emptive reductions help consumers meet their targets during the incentivized period and might support post-treatment behavioral sustenance. Our model fitting results reveal considerable heterogeneity and offer insights into how digital detox experiences can be structured to promote sustainable behavior change.

Abstract Behavioral addictions are a separate clinical entity, with addiction to various behaviors having different psychological constructs and sociological implications. Behavioral addictions do not have a diagnostic niche in the mainstream psychiatric classifications, except for a few addiction behaviors. The debate for and against including the ever-widening variety of behavioral addictions in the International Classification of Diseases and Diagnostic and Statistical Manual of Mental Disorders is ongoing. News following could be a rational behavioral addiction with important repercussions on public decisions and emotional effects on a mass scale. News utilization happens through various media, and online news consumption alters the exposure and dynamics of news utilization. The academic world tends to pay less attention to behaviors like news addictions, despite their potential as subjects for research and screening for mental health comorbidities. It is critical to screen and establish valid scales for news addiction. It is also an important area for therapeutic research, given the fact that there is increased evidence for an association between personality traits and behavioral addictions.

The obesity rate has grown to epidemic proportions in the United States. Recent scientific studies suggest that excess intake of sugar-sweetened beverages (SSBs) is one of the primary contributors to weight gain. One option to address the growing obesity epidemic is to discourage SSB consumption through fiscal policies such as imposing a soda excise tax. In this paper, we apply the Becker-Murphy model of rational addiction to present evidence that consumers are rationally addicted to the consumption of soda drinks that contain caffeine and/or sugar. Motivated by the evidence, we build a dynamic structural model to quantify the impact of soda taxes on soda purchases and consumption and study the role of addiction in influencing this impact. We extend the canonical rational addiction model by introducing a multidimensional framework of addiction, which allows for the decomposition of addiction in the context of soda consumption into two distinct components: caffeine and sugar. Using the parameter estimates, we conduct counterfactual analyses based on realistic policy scenarios and evaluate how different tax policies would affect soda purchases. For example, one policy experiment indicates that a tax of one cent per ounce only on sugary soda categories would lead to a 50.2% decrease in sugary soda consumption. In addition, we find that sugar seems to play a bigger role in influencing substitution patterns than caffeine. We further investigate how these taxes affect welfare through a change in addiction level and emphasize the importance of addiction by comparing estimation results with and without addiction in the model. To understand the externalities associated with soda taxation, we integrate our counterfactual results with causal estimates from recent medical literature. Our findings suggest that individuals could decrease their medical costs by $642 to $717 per year under various tax schemes. These results underscore the potential of soda taxes to significantly improve public health and reduce obesity-related healthcare costs. This paper was accepted by Raphael Thomadsen, marketing. Funding: This work was supported by a Nanyang Technological University start-up grant [Grant 023220-00001]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.02422 .

Cockfighting remains a deeply rooted cultural practice in the Philippines; however, when persistently pursued as a form of gambling, it generates significant but often hidden socioeconomic costs. This study explores these socioeconomic disparities caused by persistent cockfighting involvement. Anchored in Becker and Murphy’s (1988) Rational Addiction Theory, it examines how habitual gambling, despite an awareness of long-term harm, follows a rational yet destructive pattern motivated by short-term rewards such as excitement, social connection, and perceived financial gain. Employing a descriptive qualitative approach, the study identified three (3) major themes: intensified financial vulnerability, declining employment commitment, and erosion of family relation-ships. These themes encompass twelve (12) subthemes: (1) cockfighting expenses consume daily earnings; (2) bettors borrow to cover losses; (3) savings and income plans are disrupted; (4) loss of financial control; (5) absenteeism from work; (6) declining job performance; (7) weakened work commitment; (8) mismanagement of work schedules; (9) household financial strain; (10) emotional family conflicts; (11) neglect of family roles; and (12) erosion of emotional family support. Findings show that the normalization of cockfighting within com-munities reinforces these destructive behaviors. The study highlights the urgent need for multi-sectoral inter-ventions and further research to address the broader consequences of this culturally embedded yet socially harmful form of gambling.

By utilizing the rational addiction framework, this article investigates the dynamics of fertilizer consumption influenced by subsidy policies. By estimating a demand equation that incorporates addictive behaviours—tolerance, reinforcement and withdrawal—the research highlights how past consumption influences future usage, creating a cycle of dependency that is difficult to break. Empirical evidence supports the hypothesis that subsidy dependence in Indian agriculture mimics addictive behaviour, with farmers increasing consumption over time despite diminishing returns. This addiction not only perpetuates environmental and financial inefficiencies but also hinders policy reforms aimed at sustainable agricultural practices and showcases the need for a gradual transition towards more sustainable farming methods. JEL Classification: N55, Q18, H53, C23

ABSTRACT This research explores the nuanced cultural consumption behaviour of Generation Y and Generation Z and considers their centrality in shaping future cultural markets consistently with the rational addiction theory. Drawing upon a systematic literature review based on the Theory-Context-Characteristics-Methods (TCCM) framework, the paper attempts to construct a holistic understanding of the consumption patterns of these generations and the factors affecting them. Four groups of contributions emerged: those studying the determinants of the intention to consume cultural goods; those studying the determinants of attitudes towards cultural goods; those segmenting within the Gen-Y and Gen-Z cohorts; and those analysing the effect of the generational cohort on cultural consumption practices. On the basis of the findings and gaps which emerged, we elaborated a nomological network to guide future research towards unexplored areas, highlighting the importance of inspecting the link between actual consumption of cultural goods and perceived quality.

Life insurance companies, as equity stakeholders in policyholders’ lives, have incentives to mitigate their health risks. I introduce a framework that enables life insurers to evaluate the financial viability of developing and implementing health engagement programs. By leveraging a proprietary big database of health and mortality information from a large U.S. life insurer, I use machine learning techniques to quantify the benefits and use a rational addiction model to calculate the costs associated with these programs. The estimated net benefit available to the life insurer from the smoking cessation program is USD 87 million and the aggregate benefit from including other chronic conditions is USD 872 million. I explore the broader application of this framework in a general health policy context.

Fan behavior, characterized by exceptional consumption patterns, stands distinct from typical consumer behavior and has become a focal point in fan theory studies. Scholars have applied various concepts to explain this phenomenon, including fanatic consumer behavior, consumer devotion, and rational addiction. The concept of fanatic consumer behavior emphasizes fans' deep immersion and compulsive engagement in interests like collecting and discussing related merchandise, which aids in forming their unique identity and self-concept. Consumer devotion portrays a religious-like zeal in fans, evident in behaviors such as collecting memorabilia, participating in community activities, and displaying a deep commitment to their favored entities. Rational addiction, as per the economic theory, suggests fans exhibit predictable and habitual consumption patterns, contrasting the random behaviors of ordinary consumers. These theories together offer a comprehensive understanding of fan consumption behaviors, enriching the broader field of consumer behavior research by highlighting the unique and passionate engagement of fans in their areas of interest.

Lexicographic Ordering and Loss Aversion among Low-Income Farmers

PurposeThe increased usage of smartphones has made mobile payment services (MPS) popular among millennials, but it is uncertain if this shift in behavior is temporary due to situational factors like the pandemic or a long-term trend due to technological advances. This study uses the diffusion of innovation (DOI) literature to assess an integrated model including smartphone addiction, technology-related and consumer-related factors that influence consumers' intention to use MPS. It also explores the interplay of situational variables and smartphone addiction in shaping this relationship.Design/methodology/approachThe authors base the conceptual model on the theory of rational addiction and the theory of optimal flow. This model is then empirically validated through data collected from seven hundred users of MPS in India. Research hypotheses are tested using structural equation modeling and multi-group analysis.FindingsThe study finds that smartphone addiction has a positive impact on millennials' perceived advantages, compatibility, trialability and observability of MPS but does not significantly affect their perceived complexity or risk. The results also suggest that the relationship between smartphone addiction and MPS is moderated by situational factors. In low-priority situations, smartphone addiction strengthens millennials' perceptions and intentions to use MPS, while in high-priority situations, situational factors overshadow the impact of smartphone addiction.Originality/valueThe findings of the study enable organizations to capitalize on smartphone addiction-driven MPS adoption behavior to sustain long-term usage behavior by appropriately understanding the context/situation which drives MPS adoption.

ABSTRACT This paper examines the role of addiction in influencing the demand for e-cigarettes using the Nielsen Retail Scanner Data and the Nielsen Consumer Panel Data between 2012 and 2017. With a comparison of a myopic addiction model, a forward-looking model, and a rational addiction model, this paper tests whether the consumption of e-cigarettes is addictive and rational. Results from both the macro data and the microdata support the rational addictiveness of e-cigarettes. Applying an OLS method and an instrumental variable method in causal inference, results show that the long-run price elasticity estimates are larger than the estimates of the short-run price elasticity of demand for e-cigarettes. Estimates of both long-run and short-run elasticities are greater than one, −1.50 and −1.05, suggesting e-cigarette demand is elastic in both the long run and short run.

As a typical addictive consumption, cigarettes play a special role in socio-economic activities. The dual addictive characteristics of cigarette consumption make it both an income effect and a health loss effect, which has an important impact on the operation of the social economy: on the one hand, the sociable consumption of the group can maintain or strengthen the social network may bring an increase in income, that is, the income effect; on the other hand, excessive smoking makes the body much more likely to suffer from various chronic diseases, increasing the social health expenditure, and there is a health loss effect. This literature review illustrates the relationship between cigarette consumption and rational addiction behavior. I chose the base paper written by Gary S. Becker, Michael Grossman, and Kevin M. Murphy and titled "An Empirical Analysis of Cigarette consumption." The article concentrates on the smoking addiction problem and uses statistical models to collect data in the USA. Since the smoking addiction problems gets more and more serious, the paper plays an essential role in the policy planning by understanding the cigarette demand.

This study analyzes the effect of cigarette prices on cigarette consumption in Indonesia. By using aggregate macro data on cigarette consumption (administrative data) for 2015-2020, estimated using OLS, 2SLS, GMM, and System-GMM, we found that cigarette prices have a negative and significant effect on cigarette consumption based on myopic and rational addiction models. The estimation results also confirm that cigarettes are inelastic products where price changes do not significantly impact cigarette consumption. It implies that the Government needs to significantly increase excise rates and minimum selling prices regularly to control cigarette consumption more effectively.

Knowledge about the prevalence of doping in recreational sports is still limited and fragmented. The same holds true for explanations of doping prevalence rates among different groups. One of the few theoretical models that exists uses the concept of consumer capital based on Stigler and Becker’s theory of rational addiction. Building on the largest study on doping in recreational sports that has ever been conducted in Europe, the FAIR+ survey, hypotheses on the differences in doping prevalence rates, by the level of participation in competitions and by the relative time spent participating in the sport are, developed. Statistical tests support the model while also drawing attention to the limitations of this theoretical explanation.

This study extends the rational addiction theory by introducing an endogenous discounting of future utilities. The discount rate depends on habits accumulating over time because of the repeated consumption of an addictive good. The endogeneity of the discount rate affects consumption decisions via a habit-dependent rate of time preference and discloses a patience-dependence trade-off. The existence of a steady state in which habits do not grow and its optimality are proven. The local stability properties of the steady state reveal that the equilibrium can be a saddle node, implying smooth convergence to the steady state, but also a stable or unstable focus, potentially predicting real-world behaviors such as binge drinking or extreme addiction states that may drive to death. The stability of the steady state mostly depends on the habit formation process, suggesting that heterogeneity in habit formation may be a key component to explain heterogeneity in time preferences.

We test the predictions of the rational addiction model, reconceptualized as rational habit formation, in the context of handwashing in rural India. To track handwashing, we design soap dispensers with timed sensors. We test for rational habit formation by informing some households about a future change in the returns to daily handwashing. Monitoring and incentives raise handwashing contemporaneously, and effects persist well after they end. In addition, people are rational about this habit formation: when they anticipate future monitoring, they increase their current handwashing. Average child weight and height increase for all study arms given soap dispensers. (JEL D12, D83, D91, I12, I18, J13, O12)

This paper addresses one of the main empirical problems associated with rational addiction theory, namely, that its derived demand equation is not empirically distinguishable from those of models with forward-looking behavior but with time-inconsistent preferences. Using an encompassing general specification of the rational addiction model we derive a microfounded test of time-consistency. The test allows us to distinguish between time-consistent versus time-inconsistent naïve agents. The results obtained from a panel of Russian individuals conform to the theoretical predictions of the rational addiction model and the proposed test for time-consistency does not reject the hypothesis that Russian cigarette consumers are time-consistent.

This study examines the demand for cinema in Turkey using economic and other explanatory variables. The study includes annual data for the period 2009-2017 on 26 sub-regions of Turkey and a dynamic panel data analysis was performed. Furthermore, the validity of the rational addiction model developed by Becker and Murphy (1988) has been investigated for the Turkish cinema market and the role of addiction in cinema demand has been discussed. Estimation results from the dynamic panel data model show that the number of screen and the share of domestic films in total films are an important component in explaining cinema demand. Furthermore, the results showed that the demand for cinema is compatible with the rational addiction model.

The results of econometric modeling are fragile in the sense that minor changes in estimation techniques or sample can lead to statistical models that support inconsistent causal hypotheses. The fragility of econometric results undermines making conclusive inferences from the empirical literature. I argue that the program of evidential pluralism, which originated in the context of medicine and encapsulates to the normative reading of the Russo-Williamson Thesis that causal claims need the support of both difference-making and mechanistic evidence, offers a ground for resolving empirical disagreements. I analyze a recent econometric controversy regarding the tax elasticity of cigarette consumption and smoking intensity. Both studies apply plausible estimation techniques but report inconsistent results. I show that mechanistic evidence allows for discriminating econometric models representing genuine causal relations from accidental dependencies in data. Furthermore, I discuss the differences between biological and social mechanisms and mechanistic evidence across the disciplines. I show that economists mainly rely on mathematical models to represent possible mechanisms (i.e., mechanisms that could produce a phenomenon of interest). Still, claiming the actuality of the represented mechanisms requires establishing that crucial assumptions of these models are descriptively adequate. I exemplify my approach to assessing the quality of mechanistic evidence in economics with an analysis of two models of rational addiction.

In this paper, we examine the viability of avoiding value judgments encoded in thick concepts when these concepts are used in economic theories. We focus on what implications the use of such thick concepts might have for the tenability of the fact/value dichotomy in economics. Thick concepts have an evaluative and a descriptive component. Our suggestion is that despite attempts to rid thick concepts of their evaluative component, economists are often not successful. We focus on the strategy of explication to remove the evaluative component of thick concepts and argue that often economists either have to make value judgments or are unable to individuate out the phenomenon under analysis. We support our claim with a case study, namely the concept of addiction in Gary Becker and Kevin Murphy’s Theory of Rational Addiction (1988). One consequence of our analysis is that theories containing thick concepts could commit economists to making value judgments and as such undermine the fact/value dichotomy.