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The Rationality of Addiction

Deakin Papers on International Business Economics

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Field Value
 
Title The Rationality of Addiction
 
Creator Chong, Zhang
Liu, Haoping
Kim, Hyoung Jun
Wu, Qian
Xie, Samuel
 
Description This paper presents a discussion on the rationality of addiction using economic theories. Drug abuse is the dominant context for addict ion in this paper. However, it does not preclude a broader definition, encapsulating dependence on substances other than pharmacological agents; let it be nicotine , alcohol, coffee, chocolates or sex. The argument follows the progression in rationale from consumption to addiction to eventual remission. The economics of any behaviour, addiction-motivated or otherwise, distils down to the scarcity of means and our intuitions of opportunity costs involved in making a choice. The two concepts are interrelated. The process of decision-making weighs the benefit of each choice (its marginal utility) against its opportunity cost. In utility maximization theory, money is a scarce resource assumed important for maximizing utility. Therefore, choice on consumption is decided by the relative price between two goods. Overall utility is maximized when the ratio of the prices of two desired goods is equal to their marginal rate of substitution – the ratio of their marginal utilities. That is, the objective or source of utility for a consumer is to maximi ze the total value of their available money.
 
Publisher Deakin University
 
Contributor —
 
Date 2009-12-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier https://ojs.deakin.edu.au/index.php/dpibe/article/view/192
10.21153/dpibe2009vol2no2art192
 
Source Deakin Papers on International Business Economics; Vol 2, No 2 (2009); 1-8
2206-4060
 
Language eng
 
Relation https://ojs.deakin.edu.au/index.php/dpibe/article/view/192/197