Anomaly, impulsivity, and addiction

Abstract

There are two behavioral approaches to addiction: rational and irrational. The rational approach assumes that addicts have higher time preference rates and lower risk-aversion coefficients—parameters that are interpreted as impulsive preferences. On the other hand, the irrational approach argues that addiction is a consequence of anomalies such as non-expected utility and hyperbolically discounted utility. This paper integrates these two approaches and concludes that anomaly and impulsivity complementarily account for addiction.