Addictive Treatment

Abstract A treatment prescribed by an incompetent expert can cause long-term damage. However, this damage may not be recognized in the short term. I propose a theoretical model in which an incompetent expert can act dishonestly. Specifically, she can prescribe an improper treatment, which seems to be effective in the short-term but has long-term negative side effects. I show that, surprisingly, the possibility of dishonest behavior may encourage consumers to approach experts and enhance social welfare.