IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/70597.html
   My bibliography  Save this paper

A dynamic model of Gambling addiction with social costs: theory and policy solutions

Author

Listed:
  • Becchetti, Leonardo
  • Solferino, Nazaria
  • Tessitore, M. Elisabetta

Abstract

We investigate the effects of gambling addiction in a dynamic model in which wellbeing crucially depends on the accumulation of relational goods which is weakened by the consumption of gambling. We outline conditions under which gambling may become addictive leading to a suboptimal equilibrium from a social point of view. We examine the relative effectiveness of different policy solutions (tax on gambling, gambling restrictions) in bridging the distance between the equilibrium without intervention and social optimum.

Suggested Citation

  • Becchetti, Leonardo & Solferino, Nazaria & Tessitore, M. Elisabetta, 2016. "A dynamic model of Gambling addiction with social costs: theory and policy solutions," MPRA Paper 70597, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:70597
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/70597/1/MPRA_paper_70597.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bardsley, P., 1998. "Dynamic Addiction Games," Department of Economics - Working Papers Series 632, The University of Melbourne.
    2. Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1261-1303.
    3. Bruno Frey & Alois Stutzer, 2014. "Economic Consequences of Mispredicting Utility," Journal of Happiness Studies, Springer, vol. 15(4), pages 937-956, August.
    4. Kearney, Melissa Schettini, 2005. "State lotteries and consumer behavior," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2269-2299, December.
    5. Becchetti Leonardo & Giorgio Federico & Solferino Nazaria, 2011. "What to do in globalised economies if global governance is missing? The vicarious role of competition in social responsibility," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(2), pages 185-211, June.
    6. D. Dragone & F. Manaresi & L. Savorelli, 2013. "Obesity and smoking: can we catch two birds with one tax?," Working Papers wp873, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. John Mikesell & Maureen A. Pirog‐Good, 1990. "state Lotteries and Crime," American Journal of Economics and Sociology, Wiley Blackwell, vol. 49(1), pages 7-20, January.
    8. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    9. Leonardo Becchetti & Giorgio Federico & Nazaria Solferino, 2011. "Erratum to: What to do in globalised economies if global governance is missing? The vicarious role of competition in social responsibility," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 439-439, December.
    10. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    11. Dockner, Engelbert J & Feichtinger, Gustav, 1993. "Cyclical Consumption Patterns and Rational Addiction," American Economic Review, American Economic Association, vol. 83(1), pages 256-263, March.
    12. Iannaccone, Laurence R., 1986. "Addiction and satiation," Economics Letters, Elsevier, vol. 21(1), pages 95-99.
    13. Becchetti, Leonardo & Palestini, Arsen & Solferino, Nazaria & Elisabetta Tessitore, M., 2014. "The socially responsible choice in a duopolistic market: A dynamic model of “ethical product” differentiation," Economic Modelling, Elsevier, vol. 43(C), pages 114-123.
    14. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    15. Wakefield, Melanie A. PhD & Chaloupka, Frank J. PhD & Kaufman, Nancy J. RN, MS & Orleans, C. Tracy PhD & Barker, Dianne C. MHS & Ruel, Erin E. MA, 2000. "Do Restrictions on Smoking at Home, at School and in Public Places Influence Teenage Smoking?," University of California at San Francisco, Center for Tobacco Control Research and Education qt13x7b25w, Center for Tobacco Control Research and Education, UC San Francisco.
    16. Engelbert Dockner & Gustav Feichtinger, 1991. "On the optimality of limit cycles in dynamic economic systems," Journal of Economics, Springer, vol. 53(1), pages 31-50, February.
    17. Madhusudhan, Ranjana G., 1996. "Betting on Casino Revenues: Lessons From State Experiences," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(3), pages 401-412, September.
    18. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    19. Douglas M. Walker & John D. Jackson, 2011. "The Effect Of Legalized Gambling On State Government Revenue," Contemporary Economic Policy, Western Economic Association International, vol. 29(1), pages 101-114, January.
    20. Madhusudhan, Ranjana G., 1996. "Betting on Casino Revenues: Lessons From State Experiences," National Tax Journal, National Tax Association, vol. 49(3), pages 401-12, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sophie Massin, 2011. "La notion d'addiction en économie : La théorie du choix rationnel à l'épreuve," Revue d'économie politique, Dalloz, vol. 121(5), pages 713-750.
    2. Jonathan Guryan & Melissa S. Kearney, 2005. "Lucky Stores, Gambling, and Addiction: Empirical Evidence from State Lottery Sales," NBER Working Papers 11287, National Bureau of Economic Research, Inc.
    3. Jonathan Guryan & Melissa S. Kearney, 2010. "Is Lottery Gambling Addictive?," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 90-110, August.
    4. Joaquin Gomez-Minambres & Eric Schniter, 2012. "Menu-Dependent Emotions and Self-Control," Working Papers 12-20, Chapman University, Economic Science Institute.
    5. Wang Ruqu, 2007. "The Optimal Consumption and the Quitting of Harmful Addictive Goods," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-38, February.
    6. Dockner, Engelbert J & Feichtinger, Gustav, 1993. "Cyclical Consumption Patterns and Rational Addiction," American Economic Review, American Economic Association, vol. 83(1), pages 256-263, March.
    7. Jonathan Klick & Thomas Stratmann, 2006. "Subsidizing Addiction: Do State Health Insurance Mandates Increase Alcohol Consumption?," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 175-198, January.
    8. Champarnaud, Luc & Michel, Philippe, 2000. "Biens culturels, transmission de culture et croissance," L'Actualité Economique, Société Canadienne de Science Economique, vol. 76(4), pages 501-520, décembre.
    9. Xiaoou Liu & Rigoberto Lopez, 2012. "Evidence of rational addiction to carbonated soft drinks?," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(3), pages 300-317, August.
    10. Drugeon, Jean-Pierre & Wigniolle, Bertrand, 2007. "On time preference, rational addiction and utility satiation," Journal of Mathematical Economics, Elsevier, vol. 43(3-4), pages 249-286, April.
    11. Levy-Livermore, A., 1998. "Life-Expectancy Augmented Rational Addition: A Note," Economics Working Papers wp98-01, School of Economics, University of Wollongong, NSW, Australia.
    12. Jim Malley & Hassan Molana, 1999. "The Permanent Income Hypothesis Revisited," Dundee Discussion Papers in Economics 105, Economic Studies, University of Dundee.
    13. Gavrila, C. & Feichtinger, G. & Tragler, G. & Hartl, R.F. & Kort, P.M., 2005. "History-dependence in a rational addiction model," Mathematical Social Sciences, Elsevier, vol. 49(3), pages 273-293, May.
    14. Jim Malley & Hassan Molana, 2002. "The Life-Cycle-Permanent-Income Model: A Reinterpretation and Supporting Evidence," Working Papers 2002_17, Business School - Economics, University of Glasgow.
    15. Brice Corgnet & Simon Gaechter & Roberto Hernán González, 2020. "Working too much for too little: stochastic rewards cause work addiction," Working Papers 2007, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    16. Strulik, Holger, 2018. "Smoking kills: An economic theory of addiction, health deficit accumulation, and longevity," Journal of Health Economics, Elsevier, vol. 62(C), pages 1-12.
    17. Jim Malley & Hassan Molana, "undated". "The Permanent Income Hypothesis Revisited: Reconciling Evidence from Aggregate Data with the Representative Consumer Behaviour," ICMM Discussion Papers 48, Department of Economics University of Strathclyde.
    18. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," NBER Working Papers 11518, National Bureau of Economic Research, Inc.
    19. Zhang Wei, 2012. "Endogenous Preferences and Dynamic Contract Design," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-34, May.
    20. Mezza, Alvaro & Buchinsky, Moshe, 2021. "Illegal drugs, education, and labor market outcomes," Journal of Econometrics, Elsevier, vol. 223(2), pages 454-484.

    More about this item

    Keywords

    addiction; gambling; social costs;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:70597. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.