infonet-economy

This paper sets up a model for analysing the problem of rational exit where the stopping time itself is part of the integration problem. The model development is for the case of smoking. Smoking produces pleasure, pain and addiction. Our model captures all these elements and using Brownian notion and continuous martingales establishes that “quit smoking” campaigns require a two pronged attack: educational and medical. It develops a new technique which can be applied to other stopping problems where stopping time itself is part of the integration problem.