Analysis Of Rational Addiction Based On Behavioral Economics

Along with the change of time, people’s living standards has been improved greatly and the lifestyles has a profound changed, addictive behavior becomes more and more popular in our daily life.Every morning, people often have a cup of coffee, a green tea or a cigarette, and read a wetchat before starting the day’s work.Actually, it is similar to drinking,smoking and share with friends is addictive consumer behavior which called the " psychoactive revolution ", although they had weaker and minor than drug addiction, but it still reflect consumers ependence on addictive does which cause by all the troubles.However, because of the addictive behavior towards universal but forget about the consequences that will follow after,such as smoking causes cancer and cardiovascular disease, There is no dispute of this fact to many, but the people are still to smoking, such this problems are not unique to smoking, but it raises a very important question: why people choose to addictive behavior and it’s not good for utility maximization.If answer to this question, it is explained by early neurological mechanisms suggests hedonism,because of this action will produce pleasure, but when the addictive behavior stopped or reduced will make people feel very uncomfortable and therefore needs to continued consume. But from the larger perspective of neoclassical economics, the classical and authority expression of the theory is " rational addiction ",this theory is come from Becker and Murphy, they believe that addictive behavior is rational behavior based on the maximization of individual utility which includes stability preference and foresight, even though addiction capital at extremely high levels.The theory of "rational addiction " gave the first comprehensive exposition to the reasons, ormation mechanism and how to use control measures for addictive behavior,it does not reject hedonism but it acknowledg the health risk comes from addictive behavior,however,the optimal consumption and investment strategy depend on the balance between the pleasures and the risk.consider the individual should be consistent in expected utility maximization,so it is not surprising that people choose addictive behavior.In recent years, with the improvement and integration of the neurology, psychology and behavioral economics, the theory of "Rational Addiction " is commonly questioned, in particular, it can’t explain these anomalies for addictive behavior, for example,addictive consumption possesses self-control features,the moderate addictive consumption does not mean addiction and it shown that time inconsistency on consumer preferences.That is because the consumer believe they are rational for the decision under the assumption of traditional economics theory.this assumption ignores the fact in the real world: you have significant limitations for addictive behavior.In order to analyze the addictive behavior,this paper according to the theory of behavioral economics,it integrate the framework of addictive behavior with consumer behavior based on the perspective of behavioral economics,through to describe the mechanism of consumer addiction and reconstructe the control strategy for government,the purpose is to explore the decision-making behavior theory and the control strategy for consumer welfare maximization.In specific study, this paper mainly three parts expand anal sized.Firstly is the recognition, description and understanding of addictive behavior.Secondly, we makes a supplement and correction to the traditional model of rational addiction, and the same time,we not only constructs a kind of simplified addictive function without changing the assumption of rational addiction which can accurately describes the mechanism of addiction,but also we empirically examine this argument using china’s health and nutrition survey data.Once again, in most of the cases consumer are addiction but still rational,so they use health invest to offset the health risk of addictive behavior, therefore to study rational addiction model introduce health invest, on this account we discuss the health invest and health capital have impact on addictive behavior.Lastly,for this negative externality,we discuss the feasibility of government regulation and according to the ime inconsistency in addictive behavior,that to build the government regulation model based on sin tax,this policy not only to inhibit the addictive behavior,but also raise the whole social benefits.This paper on the study of rational addictive behavior provides valuable insight to consumer and government,because of that considered possible influences like self-control, it will broaden the views of addictive rearch and making proposals on addictive regulation.so this paper have some innovation includes the novelty of research angle, the applicability of research method and the effectiveness of research results.-what it includes:Fristly, this paper puts forward the idea to study addictive behavior from the prospective of research,it is based on the assumption of rational man whether the theory of rational addiction or myopia addiction,but in fact, that’s behavior decision don.t follow the principle of time-inconsistent preferences, Fixed preferences domain and make no mistake for addictive consumer.So this paper use the self-control of addictive consumer as entry points to extract time inconsistency in addictive behavior, it is the extension and expansion for frame of rational addictive model that some applications are closer to reality.Secondly, the study of addictive modeling mainly concerns smoking based on the question-and-answer survey, it also include the empirical research of rational addiction for smoke(drink),the lack of a modeling study with rational addiction might to study deep enough, this paper is not confined to the frame of rational addiction alone and add into health invest to supplement and modify the model of rational addiction,which made the meaning of used in reality look richer and deeper.And the same time,this paper study rational addiction introduce the health invest can explain such phenomena about addiction but rational,it is a beneficial supplement to the theory of rational addiction。Thirdly, the traditional policy research maily discuss tax regulation based on maximize welfare for government regulation,but which failed to define the difference between addictive consumption and other consumption,so as to still exist limitations for policy study, on the one hand, the should have the issues of self-control on addictive behavior, contrary to the best theory of time consistency and lead to overdue consumption and abuse drugs.on the other hand, as the externalities of addictive behavior, there are government failure and market failure.consequently, this paper used hyperbolic discounting to describe time inconsistency in addictive behavior,and to design the better policy of government regulation under the consumer is limited by self-control.