of rational addiction are crucial for the design of public policy. In particular, accounting for peer externalities … addiction. In contrast to prior research, we allow individuals to make their consumption decisions simultaneous with savings and … labor supply. When addictive goods have a stronger habit formation effect (an addiction effect'), individuals choose to save …

of rational addiction are crucial for the design of public policy. In particular, accounting for peer externalities … addiction. In contrast to prior research, we allow individuals to make their consumption decisions simultaneous with savings and … labor supply. When addictive goods have a stronger habit formation effect (an addiction effect'), individuals choose to save …

gap". Then policies targeting durability raise welfare. While externalities are corrected by Pigovian taxes that ignore …

) precautionary savings and (ii) production externalities. By solving the Ramsey problem analytically along the entire transitional …

This paper reviews the extent to which policy interventions can affect risky behaviours such as smoking, drinking and …

externalities-Pigouvian pricing-is suboptimal. I investigate policies aimed at externalities for time-inconsistent consumers …