Weird theory of addiction that builds on a weird concept of endogenously chosen, iterative time preferences. Your future life can be seen as a sequence of temporal selves, and each one is allowed his "own" time preference. When you evaluate a good three periods from now, you then evaluate it as follows: how much will you+3 enjoy it? How much will you+2 value that enjoyment? How much will you+1 value that valuation from you+2? And how do you-today value that valuation from you+1? Taking a drug that will make you+1 more myopic thus makes you more myopic today even before the drug has taken effect, since you then evaluate everything after you+1 through his (predicted) now-more-myopic time preferences. See also Becker and Mulligan's article on endogenous time preferences in quarterly journal.
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- 2008-04-04 08:54:34
We present a theory of addictive behaviour which can account for addicts' apparent disregard for the future consequences of their current actions. The discounting of future utility is increasing in past consumption, indicating increasingly myopic behaviour as consumption increases. The intertemporal complementarity generated by the endogenous discounting produces multiple steady states which can account for the simultaneous existence of myopic addicts and non-myopic non-addicts within a time consistent expected utility framework. The theory also accounts for the probabilistic incidence of addiction and successful rehabilitation and the possibility of recurrence.
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