This model relies on the premise that individuals recognize the total cost of their addictive behavior, monetary price of the addicti good and the cost in terms of the future. Within this framework, forward-looking behavior has one problem: It requires that individual behavior is time consistent- that future behavior is consistent with current desires regarding future behavior. Using the case of cigarette consumption, Gruber and Koszegi (2001) established that forward-looking behavior is not consistent inconsis tency into a model with forward-looking behavior, they show that the optimal gov ernment policy should take into consideration not only the externalities imposed on imposed on the addict.