Theory Of Rational Addiction Research Articles

The adoption of mobile payment services by millennials: the roles of smartphone addiction and situational variables

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.

Doping in Recreational Sport as a Risk Management Strategy

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.

An Extended Theory of Rational Addiction

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.

Rational addiction and time-consistency: An empirical test

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.

Thick Concepts in Economics: The Case of Becker and Murphy’s Theory 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.

Resolving the milk addiction paradox

The milk addiction paradox refers to an empirical finding in which consumption of non-addictive commodities such as milk appears to be consistent with the theory of rational addiction. This paradoxical result seems more likely when consumption is persistent and with aggregate data. Using both simulated and real data, we show that the milk addiction paradox disappears when estimating the data using an AR(1) linear specification that describes the saddle-path solution of the rational addiction model, instead of the canonical AR(2) model. The AR(1) specification is able to correctly discriminate between rational addiction and simple persistence in the data, to test for the main features of rational addiction, and to produce unbiased estimates of the short and long-run elasticity of demand. These results hold both with individual and aggregated data, and they imply that the AR(1) model is a better empirical alternative for testing rational addiction than the canonical AR(2) model.

Effectiveness of Actual and Anticipated Incentives for Reducing Mobile Usage

We conducted a randomized control trial (RCT) that incentivized smartphone usage reduction. Besides a control condition, two treatments were conducted. In treatment 1, subjects were incentivized to reduce their mobile screen time by 25% for the complete treatment period. In treatment 2, subjects were incentivized to reduce screen time by 25% only for the second half of the treatment period but were informed about their incentives and targets from the beginning. We find that subjects in treatment 1 reduced their mobile usage and sustained a lower post-treatment usage. Conversely, subjects in treatment 2, especially those with excessive mobile usage, started reducing their screen time even before the incentive period, but did not sustain a lower post-treatment usage. When we increased the incentive period and targets in a follow-up RCT, treatment 2 subjects sustained a lower usage. We also study the effects of reducing usage on academic performance and COVID-19 concern.

The theory of Rational Addiction.

The Theory of Rational Addictions, by Gary Becker & Kevin Murphy (1988), was a rational choice model that became a standard tool for economists modeling addictive behavior. The approach differs from other theories of addiction by modeling addictive behavior as the gradual implementation of a rational, forward-looking plan, where consumption at any point in time is partly motivated by the immediate payoff of consumption and partly by the effects this consumption has on the individual in the future. This makes addictive behavior a subset of rational behavior, requiring no more specific government policies or attention than any other consumption choice. Later work by economists extended the theory in different ways, allowing it to match an increasing number of consumption patterns, and searched for ways to test the forward-looking assumption in different types of market data. While the work was successful as a contribution to rational choice theory, with possible statistical applications, there are several reasons to dismiss its usefulness as an explanation of real-world addictive behavior and its ability to assess the welfare effects of addictions.

Narcotics Drug Use in West Africa and Its Impact on Human Security

The West African sub-region has increasingly become a consumer and a final destination market for all types of drugs of abuse attributed to regional drug trafficking that has caused a supply-driven increase of narcotic drugs. This paper therefore reviewed the impact of narcotic drug use on human security of states in the West African sub-region and adopted the theory of rational addiction as theoretical framework for analysis. The paper also employed a desk-review research approach with the reports and evaluations obtained from secondary sources of data analyzed through content analysis. The paper found that narcotic drug use is associated with several drug problems that include biological, environmental, behavioral, cognitive and emotional risk factors. The study concluded that narcotic drug use has negative impact on the human security of West African states and recommended that ECOWAS Commission and member states should address the structural, political and socio-economic weaknesses facing states in the region by adopting policy measures aimed at improving human security. Furthermore, drug supply reduction strategies which primarily focus on interdiction actions should be complemented with harm reduction policies that will address public health and developmental challenges.

Accounting for tastes: do low-income populations have a higher preference for spicy foods?

Based on the Theory of Rational Addiction (TORA), this paper uses the China Health and Nutrition Survey (CHNS) data to identify the correlation between income and preference for spicy foods. Results show that low-income individuals have a higher preference for spicy foods compared to high-income people, even in the same geographic area. Males and young people prefer spicy foods more than females and the elderly. Instrumental variable (IV) regression results also support that low-income individuals have a higher preference for spicy foods. The effect-channel results show that income affects the preference of spicy foods through health behaviors and health awareness. However, there is no significant evidence to support arguments about health capital stock and food selection channels.

Dynamic panel data estimation of an integrated Grossman and Becker–Murphy model of health and addiction

We propose a dynamic panel data approach to estimate a model that integrates the Becker–Murphy theory of rational addiction with the Grossman model of health investment. We define an individual’s lifetime smoking consumption and investments in health capital as simultaneous choices within a single optimisation problem. We show that this can be estimated using GMM system estimation of two stand-alone single fourth-order difference equations of health capital and smoking. These preserve roots and fundamental dynamics of the original system of four interrelated first-order equations. Monte Carlo simulations confirm that this reduced-form dynamic estimation also produces very similar estimates to the ones of the initial system of equations. We argue that, in the presence of long panel data, this approach may provide a feasible alternative for the estimation of a complex life-cycle model of human capital.

Uncovering the Behavioral Implications of the Rational Addiction Assertion

AbstractThe consumption functions in Becker and Murphy's (1988) rational addiction theory are subjected to an extensive comparative dynamics analysis. They are shown to be intrinsically characterized by a symmetric and positive semidefinite matrix of generalized Slutsky-like terms. In contrast, the typical comparative dynamics expressions, comprised of the individual partial derivatives of the consumption functions with respect to the parameters and state variables, do not possess refutable implications under the basic assumptions of the theory. Only with additional sufficiently strong assumptions, of which some are identified here, can they be signed.

Demand for heterosexual commercial sex services in Ibadan, Nigeria

Context/Backgroud: This paper examines the demand for heterosexual commercial sex services in Ibadan, Nigeria with specific focus on the sub-markets where different commercial sex activities are usually traded. Identified players include commercial sex workers (females), clients (males) and intermediaries (exploiters). Data Sources & Method: This study employed multi-stage sampling procedure. At the first stage, the most populous local government area in Ibadan was purposively selected; for the second stage, ten locations where commercial sex work exists were purposively selected while eighteen (18) clients were randomly and discretely selected from each of the sites at the last stage. The eventual sample size was one hundred and sixty-eight (168) clients. The empirical model derived from the rational addiction theory and it was estimated using Ordinary Least Squares (OLS) technique. Results: The results show that the demand is highly responsive to age, marital status, income, tastes and preferences and the price (with respect to condom usage). Clubs/bars, streets and houses were the highly patronised sub-markets, though the demand was increasing with short time and per night services in some sub-markets, it was decreasing in others. The nature of risk became more pronounced with clubs/bar clients being more risk loving while others were risk averse in other sub-markets based on their respective significant condom usage.

The Short- and Long-Run Effects of Smoking Cessation on Alcohol Consumption

This paper examines the short- and long-term effect of quitting smoking on alcoholicbeverage consumption using the Lung Health Study, a randomized smoking cessationprogram. Building on the theory of rational addiction, I estimate the relationship betweensmoking and alcohol consumption using several different smoking measures.Moreover, I implement a two-stage Least squares estimation strategy utilizing the randomized smoking cessation program as an instrument. The empirical analysis leadsto three salient findings. First, self-reported and clinically verified smoking measuressuggest that quitting smoking lowers alcoholic beverages consumption by 11.5%. Second,cigarette consumption dating back up to 60 months affects alcohol consumption,and those with the highest average consumption see the largest increase in alcohol consumption.Lastly, the length of abstaining from smoking decreases alcohol consumption,where participants decrease alcohol consumption by up to 20% from baseline levelsafter five years of smoking cessation. As a result, these findings suggest that the publichealth and finance benefits are undervalued in smoking cessations treatments.

Questioning rationality: the case for risk consumption

The standard assumption of rational, forward looking behavior has been heavily questioned given the impossibility of understanding some risk consumption behaviors within such a framework. The Becker and Murphy theory of rational addiction made a start on this debate fostering new refinements within the original rational theory framework as well as promising approaches based on the latest developments of cognitive science.This paper makes an overview confronting two main approaches highlighting their different time preferences assumptions. On the one hand the debate assumes rationality even in extreme situations of risk consumption - addictive behavior. On the other, new developments in the explanation of habits and addictive behaviours take an economic-psychological approach into consideration and have substantially different policy implications.

Apports de la psychologie à l’analyse économique des comportements addictifs

Les comportements individuels sont un objet d’étude commun à l’économie et à la psychologie. Le propos est d’identifier les apports potentiels de cette dernière à la théorie économique dans le domaine des comportements addictifs et ce, afin de pallier les limites des modèles actuels essentiellement issus de la théorie de l’addiction rationnelle. La prise en compte d’une polyphasie cognitive chez l’individu, ainsi que du rôle de ses émotions et de son identité sociale dans un modèle économique, permettent également d’élargir l’éventail des politiques publiques préconisées, qui se limitaient auparavant à des hausses de prix et à une limitation des externalités.

Frequency of museum attendance: motivation matters

Some recent empirical contributions have highlighted that tourists often go to museums yet appear to extract little utility from the experience. We argue that this is often the case with agents who visit museums only while on holiday and results from a temporary lack of substitute experience goods or compliance with a must-do list. If such agents behaved according to Stigler and Becker’s rational addiction theory, they would also visit museums while at home. However, most do not, which makes them constantly occasional consumers. We indirectly test for the presence of constantly occasional museum attendance by tourists, using data from a survey conducted in 2012 at Vittoriale, the most popular museum at Lake Garda, a renowned Italian tourist destination. By applying multiple correspondence analysis to a question on motivations to visit the museum, we obtain two dimensions of motivation: one based on a search for knowledge and the other based on a more recreational attitude. Identification of the latter is a new finding in itself. We include these dimensions as regressors in a model used to explain museum attendance. We find, as expected, that light consumption negatively affects attendance. We therefore argue that empirical analyses of museum attendance should not disregard light motivation as a possible driver.

A theory of social media dependence: Evidence from microblog users

Anecdotal evidence suggests that problematic use of social media has become prevalent among a large proportion of users and led to significant behavioral and psychological problems. Nevertheless, theory-driven investigation into this issue is still relatively scarce, and the few existing studies tend to adopt only a conceptual or descriptive approach. This study uses a theory-guided approach and seeks to clarify the development of psychological dependence in the context of social media, with a particular focus on microblogging. Building on the theory of rational addiction, this study hypothesizes that dependence is initially developed from habit. Furthermore, the study draws on the cognitive–affective–behavioral modeling paradigm to hypothesize that maladaptive cognition and affect tend to distort habit into psychological dependence. We conduct a longitudinal empirical test to validate the underlying mechanism of social media dependence as theorized in our study. The study concludes with a discussion of theoretical and practical implications.

Rational Criminal Addictions

This article argues that repeated criminal misconduct, at least in some areas, has the characteristics of a habit or addiction. Curiosity or a transient attraction can lead an offender to commit her first crime. This first infraction will give her a sense of how much she enjoyed it, and whether she has the talent, and stomach, to continue down a path of repeated misconduct. If the feedback is sufficiently positive, the offender may commit a second crime, and possibly a third. At some point, the offender will find herself with the opportunity to commit yet another crime, and realize that the immediate disutility of stopping, of going back into a life as a law-abiding citizen, is too great: she may find that the immediate disutility of foregoing a criminal opportunity is too high. Once the habit takes hold, the offender may continue to commit crimes, even if doing so leads her to suffer large aggregate negative internalities. An offender is thus “addicted to criminal misconduct” if her previous history of misconduct increases the marginal utility of committing a crime in the current period by a sufficient amount; that is, if the immediate disutility from stopping has reached a cut-off point, such that she violates the law notwithstanding the fact that but-for the addiction she would have obeyed the law. The addicted criminal trades off the heightened immediate disutility from obeying the law against the reduction in total utility due to the negative internalities—including expected sanctions. After setting forth the rational criminal addiction theory, the article develops a number of legal implications that follow from the theory.

How Do Smokers Respond to Cigarette Taxes? Evidence from China's Cigarette Industry.

This paper examines how Chinese smokers respond to tax-driven cigarette price increases by estimating a discrete choice model of demand for differentiated products, using annual nationwide brand-level cigarette sales data in China from 2005 to 2010. We allow for substitution between different cigarette brands and also incorporate key features of rational addiction theory into the model. Results show that the average own-price elasticity of demand for cigarettes at the brand level is -0.807, and the overall price elasticity of cigarettes at the market level is -0.488 in China. We find tax-induced substitution toward low-price cigarettes as well as high-tar cigarettes and that tax hikes encourage within-class substitution more than across-class substitution. These results have important policy implications for the potential effects of cigarette taxation. Copyright © 2014 John Wiley & Sons, Ltd.