Healthy vs. unhealthy food: a strategic choice for firms and consumers
In this paper, we carry out a theoretical analysis of the strategic choice made by firms regarding the type of food they market when they face consumers who care about the healthy/unhealthy attributes of the product but incur in emotional/health costs when the food they consume has unhealthy attributes. We consider a two-stage game. In the first stage, one of the firms chooses the unhealthy content of its product. In the second stage, both firms simultaneously decide their prices. We find that, depending on the parameters of the model, product differentiation can be maximal or less than maximal. The firm that produces the unhealthy food charges a higher price and obtains a larger share of the market unless the emotional/health costs and the unhealthy food production costs are relatively high. We also find that educational campaigns will not always reduce the demand for the unhealthy food or the degree of the unhealthy attribute. JEL Classification:I10, I18, L11 Copyright Antonanzas and Rodriguez-Ibeas; licensee Springer. 2011
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 1 (2011)
Issue (Month): 1 (December)
|Contact details of provider:|| Web page: http://www.springer.com/economics/journal/13561|
|Order Information:||Web: http://link.springer.de/orders.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David M. Cutler & Edward L. Glaeser & Jesse M. Shapiro, 2003.
"Why Have Americans Become More Obese?,"
Harvard Institute of Economic Research Working Papers
1994, Harvard - Institute of Economic Research.
- Shapiro, Jesse & Glaeser, Edward & Cutler, David, 2003. "Why Have Americans Become More Obese," Scholarly Articles 2640583, Harvard University Department of Economics.
- David Cutler & Edward Glaeser & Jesse Shapiro, 2003. "Why Have Americans Become More Obese?," NBER Working Papers 9446, National Bureau of Economic Research, Inc.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
- Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
- Zheng, Xiaoyong & Zhen, Chen, 2008. "Healthy food, unhealthy food and obesity," Economics Letters, Elsevier, vol. 100(2), pages 300-303, August.
When requesting a correction, please mention this item's handle: RePEc:spr:hecrev:v:1:y:2011:i:1:p:1-8:10.1186/2191-1991-1-4. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.