The McDonald's Equilibrium: Advertising, Empty Calories, and the Endogenous Determination of Dietary Preferences
A comparison of accepted nutritional advice with actual American dietary practice suggests that many people fail to eat well in spite of well-documented health consequences. Popular culture often labels the worst offenders as lacking in â€œself-control,â€ and many blame the aggressive advertising campaigns of the fast-food and snack-food industries for manipulating consumers into poor diets, but these conclusions are not easily reconciled with a neoclassical approach to economic decision theory. This essay considers the consumerâ€™s â€œdiet problemâ€ in light of emerging evidence from a number of behavioral sciences. In particular, it is argued that human evolution in the distant past resulted in an elegant solution to this problem (of search for a suitable diet in an uncertain environment), which any neoclassical economist would recognize. In modern environments, however, the signals that formerly provided information in the consumerâ€™s search problem are subject to manipulation by food-producing firms. Confirmation by molecular biologists that many human responses to these signals are firmly encoded in our genes suggests a need to re-evaluate the welfare economics of the food industry.
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