  Addiction is a major societal issue leading to billions in healthcare losses
per year. Policy makers often introduce ad hoc quantity limits-limits on the
consumption or possession of a substance-something which current economic
models of addiction have failed to address. This paper enriches Bernheim and
Rangel (2004)'s model of addiction driven by cue-triggered decisions by
incorporating endogenous choice of how much of the addictive good to consume,
instead of just whether or not consumption happens. Stricter quality limits
improve welfare as long as they do not preclude the myopically optimal level of
consumption.
