Most governments are worried about addiction as a public health issues. Economists like Gary Becker have argued that agents can be rationally addicted. According to them agents choose to partake in addictive behaviour as it maximizes their expected utility, that is the benefit they get outweighs the health risk from addiction. A conclusion from this is that agents are responsible for their own decisions. In class, we have seen alternative behavioural economic theory that would instead argue that agents might not process the risk of addiction properly. Give a description of one such alternative theory. You have to explain the core idea of that theory and then explain how it relates to addictive behaviour. Make sure to name researchers who have developed this theory.

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To understand the whole concept firstly we have to understand the concept of agent Agents means ... View the full answer