Many of the most important choices in people's lives have an inter-temporal dimension, i.e., these choices are associated with a flow of benefits or costs that accrue in the future. In addition, such choices are frequently habit-forming. Yet, little is known about habit-forming inter-temporal...

The fundamental question addressed in this research is the degree to which models of optimal intertemporal choice are good descriptions of non-interactive individual intertemporal behavior in the presence of habit formation. The existence of loss avoidance does, however, not explain why subjects...

The theory of rational addiction assumes that addicts' behavior is fully rational. Common sense and psychological introspection suggest, however, that addictive behavior is irrational. Without knowledge of the addicts' preferences this dispute cannot be resolved. This paper reports the results...