Smoking today and stopping tomorrow: a limited foresight perspective

Philippe Jehiel (1, 2, 3) , Andrew Lilico (4)

1 PSE - Paris-Jourdan Sciences Economiques
2 PSE - Paris School of Economics
3 UCL - University College of London [London]
4 Europe Economics

This article considers an intertemporal decision problem in which the agent has limited foresight. It offers an interpretation of why people may smoke when they are young--as a result of having a short horizon of foresight--and refrain from smoking when they get older--as a result of having better foresight.

Keywords: Bounded rationality; Limited foresight; Short-sightedness; Smoking

Domains: Humanities and Social Sciences; Economics and Finance

Philippe Jehiel, Andrew Lilico. Smoking today and stopping tomorrow: a limited foresight perspective. CESifo Economic Studies, 2010, 56 (2), pp.141-164. ⟨10.1093/cesifo/ifp028⟩. ⟨halshs-00754440⟩