Economists have not always modelled addictive substance use in terms of the four common attributes of addictiveness: persistence of use, tolerance, withdrawal and reinforcement. In health economics they have modelled addiction in broadly three ways. The first is in imperfectly rational models in which


individuals effectively have two mutually incompatible but each internally consistent utility functions (for example, a farsighted one and a shortsighted one). Second, there are myopic irrational models, in which future consequences are not well understood or, if understood, are heavily discounted or ignored. Finally, there is 'rational addiction', in which the addictive habit enhances both current and future utility sufficiently to overcome the (rationally perceived) negative consequences for the user.

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