Risky Behavior among Youths: Some Issues from Behavioral Economics

Ted O'Donoghue and Matthew Rabin

in Risky Behavior among Youths

Published by University of Chicago Press

Published in print March 2001 | ISBN: 9780226310138
Published online February 2013 | e-ISBN: 9780226309972 | DOI:
Risky Behavior among Youths: Some Issues from Behavioral Economics

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This chapter explores how recent efforts combining psychology and economics can be used to help understand risky behavior by adolescents. It discusses what some of the main insights and issues raised by recent research in behavioral economics suggest about risky behavior by adolescents. It argues that the most central contribution of behavioral economics may be helping policy makers understand the connection between behavior and welfare. The chapter first discusses psychological evidence on young people's decision-making compared with adults, assuming that a person's overall well-being is determined by adding up his/her well-being at each moment. It then contends that, from a normative perspective, there should be no discounting. It also describes some systematic ways in which youths may underestimate the future harm caused by their current behavior. In addition, it considers the logic of repeated risky choices largely in a rational choice setting and how those implications might differ when people make errors in assessing risks, have self-control problems, or incorrectly predict their own future preferences.

Keywords: youths; risky behavior; adults; decision-making; behavioral economics; welfare; discounting; rational choice; future harm; self-control

Chapter.  18825 words.  Illustrated.

Subjects: Economics

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