ABSTRACT
Within standard economic approaches based on assumptions of rational, forward-looking agents, self-destructive habits and addictions are anomalous. Behavioural economics offers some deeper insights into what motivates people to do things that adversely affect their future wellbeing. Potentially, bad habits and addiction can bring together models of time inconsistency and preference reversals (chapter 9) with insights about the role of emotions and visceral factors (chapter 8). So far, however, the analysis in economics has tended to focus on rational addiction models based on exponential discounting assumptions.
