15. In Becker and Murphy’s “rational addicts” model, smokers are perfectly aware

Question

15. In Becker and Murphy’s “rational addicts” model, smokers are perfectly aware of the potential for smoking to
cause addiction, and they take this into account when deciding whether or not to smoke. Suppose a new technology
– such as a nicotine patch – is 3 invented that makes quitting smoking much easier (less costly) for an addict. If
Becker and Murphy’s model is correct, what effects would you expect this invention to have on people’s smoking
behavior? Would your answer be different for young people than for older people?

Explanation / Answer

The Becker an d murphy model deals with the inter-temporal decision. The introduction of the new technique will have a positive impact and will induce the older people to quit since now the cost of quitting is lower. However, the young people will act in an opposite manner presuming that quitting at a later period will be less costly than quitting now. Thus the smoking rate tends to rise among the youth and among the seniors.

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