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Published in:
The Paradox of Self-Destructive Choices Read chapter Read first chapter

2016 | OriginalPaper | Chapter

6. Coping with Self-Destructive Behavior

Author : Shinsuke Ikeda

Published in: The Economics of Self-Destructive Choices

Publisher: Springer Japan

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Abstract

The standard economics known as neoclassical economics assumes that humans are quite rational subjects who always act consistently, like a machine, when solving an optimization problem. Therefore, in neoclassical economics, there are no such things as self-control problems, inconsistent behaviors, or regrettable behaviors. If there is a problem, it occurs only in cases where the choices are distorted due to incomplete information or some kind of transaction constraints or in cases (such as those involving pollution) where someone’s choice bypasses the market and directly influences others (in what is called an externality). As long as there is no such problem, our choices should be rational, either privately or socially, so that efficient resource allocation would be attained through the price mechanism of the market.

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previous chapter Overborrowing, Overeating, and Addictive Behavior
next chapter Erratum to: The Economics of Self-Destructive Choices
Footnotes
1
The healthcare system for the elderly aged 75 or older itself is currently under review for a significant revision, including outright abolition; however, it is possible that a system will be introduced in the future that will “pass down” to insurance premiums the increased burden of healthcare cost due to issues such as obesity.
 
2
The Supreme Court decision issued in January 2006 determined that an interest rate up to 29.2 %, which had been allowed as constructive repayment as per the Investment Law, cannot be allowed in practice, where constructive repayment (or repayment regarded as valid) refers to explicitly agreed loans with a higher than legal interest rate. Therefore, it became possible for a debtor to demand a refund for the payment beyond the cap interest rate (e.g., 20 % for loans under JPY 100,000). As a result, the actual maximum interest rate in the consumer financing market was reduced in the first half of 2006.
 
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Metadata
Title
Coping with Self-Destructive Behavior
Author
Shinsuke Ikeda
Copyright Year
2016
Publisher
Springer Japan
Book
The Economics of Self-Destructive Choices

Print ISBN: 978-4-431-55792-0

Electronic ISBN: 978-4-431-55793-7

Copyright Year: 2016

DOI
https://doi.org/10.1007/978-4-431-55793-7_6