Antonio Rangel

Swedish Economic Policy Review, 12, 2005, 99-144

A growing consensus in neuroscience regarding how addictive substances affect the brain supports the view that the consumption of addictive substances is sometimes rational, and sometimes a cue-triggered mistake. Neuroscientists have gained considerable insight into the specific processes that appear responsible for decisionmaking malfunctions involving addictive substances, and into the conditions under which these malfunctions occur. These insights lead to a new economic theory of addiction that bridges the gap between neuroscience and public policy. While the theory identifies a potential role for Draconian policies such as criminalization, it explicitly cautions against strategies that tend to magnify economic burdens on those who become addicted, and underscores the benefits of policies that reduce these burdens. For example, it suggests that, even when addictive substances are consumed to excess, “sin taxes” are counterproductive in identifiable circumstances. It also places a high value on policies that increase the likelihood of successful self-regulation without making particular choices compulsory, and it identifies a central role for “cognitive” policies, including the suppression of certain environmental cues (e.g., through limitations on advertising), and the dissemination of counter-cues.

Research Fields : 
Behavioral Economics
Behavioral Public Economics
Behavioral Welfare Economics
Psychology of Choice
Public Economics
Taxation, Budgets & Deficits