An Economic Model of the Stages of Addictive Consumption

The aim of this research is to build a model of addictive consumption by taking into account consumers' growing loss of self-control, as well as their lack of empathy for their future selves. Such model reveals that individuals follow a given consumption pattern composed of five stages, and thereby, that stable addictive consumption level does not exist outside of abstention. It permits to explain how consumers modify their environment in order to get rid of their addiction and why some of them find it difficult to successfully abstain. The analysis of the model shows that they do not uniformly react to public policies according to the stage in which they are placed. I argue that an optimal policy should increase consumers' perceived losses of consuming without cutting too much their budget (as repeated price increases do). Moreover, it should be accompanied by more credible propositions of quitting strategies in order to prevent denial phenomenon and foster the decision to abstain. Furthermore, prices of such strategies should be low enough in order to favor a longer use of them and a quitting success