TITLE:
Peer-Pressure and Rational Underage Binge-Drinking
AUTHORS:
Amnon Levy
KEYWORDS:
Minimum Age; Peer Pressure; Rationality; Binge-Drinking
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.1,
February
18,
2014
ABSTRACT:
This paper provides a utility-based definition of binge-drinking and
examines the compatibility of this phenomenon with a rational decision making. Prohibition
of young people’s consumption of alcohol is frequently
violated by binge-drinking in groups. The analysis considers the roles of
peer-pressure, full price of alcohol and crowding in underage group-drinking
sessions and identifies the conditions for binge-drinking by expected utility
maximizing members. Rational binge-drinking occurs when the impact of the
peer-pressure on the individual member’s utility exceeds the loss of utility
from the forgone spending on all other goods associated with the expected full
marginal cost of consuming alcohol.