Author(s)

Nazaria Solferino¹, Leonardo Becchetti², Maria Elisabetta Tessitore²

¹University of Tor Vergata, Rome, Italy.
²Department of Economics, University of Tor Vergata, Rome, Italy.

We investigate the effects of gambling addiction in a dynamic model in which wellbeing crucially depends on the accumulation of relational goods which is weakened by the consumption of gambling. We outline conditions under which gambling may become addictive leading to a suboptimal equilibrium from a social point of view. We examine the relative effectiveness of different policy solutions (tax on gambling, gambling restrictions) in bridging the distance between the equilibrium without intervention and social optimum.

Addiction, Gambling, Social Costs

Solferino, N. , Becchetti, L. and Tessitore, M. (2018) A Dynamic Model of Gambling Addiction with Social Costs: Theory and Policy Solutions. Modern Economy, 9, 2039-2051. doi: 10.4236/me.2018.912127.