Perali, Federico; Piccoli, Luca; Wangen, Knut R. - Departament d'Economia Aplicada, Facultat de Ciències … - 2015
This study extends the Rational Addiction theory by introducing an endogenous discounting of future utilities. The discount rate depends on habits accumulation over time which occur because of the repeated consumption of an addictive good. The endogeneity of the discount rate affects consumption...