Choice, Social Interaction and Addiction: The Social Roots of Addictive Preferences

Abstract
It is argued that addicts, as people in general, are forward-looking and that they try to make the best of what they have got. However, this does not imply that they are fully rational. Cognitive defects, instabilities in preferences, and irrationalities in the form of wishful thinking and dynamical inconsistency play an important role in addictive behaviours. These “imperfections” in people's rationality may not have very large consequences in the case of ordinary goods, but their effect can be dramatic in relation to addictive goods. In the first part of the paper, the rational addiction theory and the empirical evidence that have been presented in support of the theory is reviewed. Regarding the conventional tests of the theory by econometric methods, it is argued that the tests are misguided, both theoretically and methodologically. Furthermore, it is claimed that the definition of addiction implicit in the rational addiction theory is unrealistic, and that the theory makes unrealistic assumptions about human nature. Some empirical evidence for these claims is reviewed. It is concluded that although the theory has its virtues, it faces serious problems and must be rejected in its original form. Secondly, the socio-cultural embeddedness of addictive behaviours, and the social roots of individual preferences, are discussed. These issues are more or less ignored in rational addiction theory. It is argued that we cannot expect to obtain a proper understanding of many addictive phenomena, unless they are seen in their proper socio-cultural context.