IDEAS home Printed from https://ideas.repec.org/p/otg/wpaper/1315.html
   My bibliography  Save this paper

The Economics of Information, Deep Capture, and the Obesity Debate

Author

Listed:
  • Trenton G. Smith

    (Department of Economics, University of Otago, New Zealand)

  • Attila Tasnadi

    (Corvinus University of Budapest)

Abstract

The economic theory of regulatory capture predicts that industry groups will attempt to influence their regulators (for example, by lobbying for rules that exclude competition). It has been suggested that the same logic applies to any powerful institution with the ability to affect industry profits. When the aim of industry is to alter the public's perception of its product (for example, by disseminating favorable messages to the news media or via an advertising campaign, or by funding industry-friendly scientific research), the end result has been dubbed deep capture. We develop a formal model of deep capture, in which consumers have imperfect information about product quality, and a dominant producer is able to increase his profits by altering the parameters of the consumer's search problem. We demonstrate the empirical relevance of the phenomenon with a discussion of the food industry response to the obesity epidemic.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Trenton G. Smith & Attila Tasnadi, 2013. "The Economics of Information, Deep Capture, and the Obesity Debate," Working Papers 1315, University of Otago, Department of Economics, revised Nov 2013.
    • Handle: RePEc:otg:wpaper:1315
    as

    Download full text from publisher

    File URL: http://www.otago.ac.nz/economics/otago111194.pdf
    File Function: First version, 2013
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andrew Stivers, 2009. "Regulating Market Language: Market Failure in Descriptive Signals," Journal of Consumer Policy, Springer, vol. 32(1), pages 23-41, March.
    2. Smith, Trenton G. & Chouinard, Hayley H. & Wandschneider, Philip R., 2011. "Waiting for the invisible hand: Novel products and the role of information in the modern market for food," Food Policy, Elsevier, vol. 36(2), pages 239-249, April.
    3. Eid, Jean & Overman, Henry G. & Puga, Diego & Turner, Matthew A., 2008. "Fat city: Questioning the relationship between urban sprawl and obesity," Journal of Urban Economics, Elsevier, vol. 63(2), pages 385-404, March.
    4. John Cawley & Chad Meyerhoefer & David Newhouse, 2007. "The impact of state physical education requirements on youth physical activity and overweight," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1287-1301, December.
    5. Chou, Shin-Yi & Grossman, Michael & Saffer, Henry, 2004. "An economic analysis of adult obesity: results from the Behavioral Risk Factor Surveillance System," Journal of Health Economics, Elsevier, vol. 23(3), pages 565-587, May.
    6. Wim Verbeke, 2005. "Agriculture and the food industry in the information age," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(3), pages 347-368, September.
    7. Weitzman, Martin L, 1979. "Optimal Search for the Best Alternative," Econometrica, Econometric Society, vol. 47(3), pages 641-654, May.
    8. N/A, 2009. "contributors," Politics, Philosophy & Economics, , vol. 8(1), pages 131-131, February.
    9. Trenton G. Smith, 2004. "The McDonald’s Equilibrium. Advertising, empty calories, and the endogenous determination of dietary preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 23(3), pages 383-413, December.
    10. Smith, Trenton G. & Tasnadi, Attila, 2007. "A theory of natural addiction," Games and Economic Behavior, Elsevier, vol. 59(2), pages 316-344, May.
    11. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    12. N/A, 2009. "contributors," Politics, Philosophy & Economics, , vol. 8(2), pages 243-243, June.
    13. N/A, 2009. "contributors," Politics, Philosophy & Economics, , vol. 8(3), pages 351-352, August.
    14. John Cawley & Chad Meyerhoefer & David Newhouse, 2007. "The impact of state physical education requirements on youth physical activity and overweight," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1287-1301.
    15. Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(2), pages 181-214, Fall.
    16. Cawley, John & Frisvold, David & Meyerhoefer, Chad, 2013. "The impact of physical education on obesity among elementary school children," Journal of Health Economics, Elsevier, vol. 32(4), pages 743-755.
    17. Trenton G. Smith, 2012. "Obesity and the Economics of Prevention: Fit Not Fat," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 815-817.
    18. Roe, Brian E. & Teisl, Mario F., 1998. "The Economics Of Labeling: An Overview Of Issues For Health And Environmental Disclosure," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-11, October.
    19. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karl Aiginger, 2016. "New Dynamics for Europe: Reaping the Benefits of Socio-ecological Transition – Part I: Synthesis. WWWforEurope Deliverable No. 11," WIFO Studies, WIFO, number 58791, April.
    2. Kolodinsky, Jane & Reynolds, Travis & Baker, Daniel & Watts, Richard, 2015. "Regulatory Capture and Support for and Opposition to Controversial Food System Policy Issues: An Exploratory Analysis," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202700, European Association of Agricultural Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Smith, Trenton G. & Chouinard, Hayley H. & Wandschneider, Philip R., 2011. "Waiting for the invisible hand: Novel products and the role of information in the modern market for food," Food Policy, Elsevier, vol. 36(2), pages 239-249, April.
    2. Ehmke, Mariah Dolsen & Bonanno, Alessandro & Boys, Kathryn & Smith, Trenton G., 2019. "Food fraud: economic insights into the dark side of incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), October.
    3. Cawley, John, 2015. "An economy of scales: A selective review of obesity's economic causes, consequences, and solutions," Journal of Health Economics, Elsevier, vol. 43(C), pages 244-268.
    4. Smith, Trenton G. & Tasnadi, Attila, 2012. "'Hidden Quality' in the History of American Food: Consumer Search vs. Industry Obfuscation?," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125103, Agricultural and Applied Economics Association.
    5. Trenton Smith & Hayley Chouinard & Philip Wandschneider, 2009. "Waiting for the Invisible Hand: Market Power and Endogenous Information in the Modern Market for Food," Working Papers 2009-07, School of Economic Sciences, Washington State University.
    6. Georgia S. Papoutsi & Andreas C. Drichoutis & Rodolfo M. Nayga Jr., 2013. "The Causes Of Childhood Obesity: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 743-767, September.
    7. Dimitrios Nikolaou & Laura M. Crispin, 2022. "Estimating the effects of sports and physical exercise on bullying," Contemporary Economic Policy, Western Economic Association International, vol. 40(2), pages 283-303, April.
    8. Trenton Smith, 2009. "Reconciling psychology with economics: Obesity, behavioral biology, and rational overeating," Journal of Bioeconomics, Springer, vol. 11(3), pages 249-282, December.
    9. Black, Nicole & Johnston, David W. & Propper, Carol & Shields, Michael A., 2019. "The effect of school sports facilities on physical activity, health and socioeconomic status in adulthood," Social Science & Medicine, Elsevier, vol. 220(C), pages 120-128.
    10. Bart H. H. Golsteyn & Maria W. J. Jansen & Dave H. H. Van Kann & Annelore M. C. Verhagen, 2020. "Does Stimulating Physical Activity Affect School Performance?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(1), pages 64-95, January.
    11. Alessandro De Chiara & Marco A. Schwarz, 2020. "A Dynamic Theory of Regulatory Capture," Working Papers 2020-12, Faculty of Economics and Statistics, Universität Innsbruck.
    12. Steven Bednar & Kathryn Rouse, 2020. "The effect of physical education on children's body weight and human capital: New evidence from the ECLS‐K:2011," Health Economics, John Wiley & Sons, Ltd., vol. 29(4), pages 393-405, April.
    13. Odelia Rosin, 2012. "Weight‐Loss Dieting Behavior: An Economic Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 21(7), pages 825-838, July.
    14. Knaus, Michael C. & Lechner, Michael & Reimers, Anne K., 2020. "For better or worse? – The effects of physical education on child development," Labour Economics, Elsevier, vol. 67(C).
    15. Jan Marcus & Thomas Siedler & Nicolas R. Ziebarth, 2022. "The Long-Run Effects of Sports Club Vouchers for Primary School Children," American Economic Journal: Economic Policy, American Economic Association, vol. 14(3), pages 128-165, August.
    16. McInerney, Melissa & Meiselbach, Mark K., 2020. "Distributional Effects of Recent Health Insurance Expansions on Weight-Related Outcomes," Economics & Human Biology, Elsevier, vol. 38(C).
    17. Ehmke, Mariah D. & Willson, Tina M. & Schroeter, Christiane & Hart, Ann Marie & Coupal, Roger H., 2009. "Obesity Economics for the Western United States," Western Economics Forum, Western Agricultural Economics Association, vol. 8(2), pages 1-13.
    18. Sen Choudhury, Rebecca & Conway, Karen Smith, 2020. "The effect of tobacco policies on youth physical activity," Economics & Human Biology, Elsevier, vol. 38(C).
    19. Patricia M. Anderson & Kristin F. Butcher & Diane Whitmore Schanzenbach, 2017. "Adequate (or Adipose?) Yearly Progress: Assessing the Effect of “No Child Left Behind” on Children's Obesity," Education Finance and Policy, MIT Press, vol. 12(1), pages 54-76, Winter.
    20. Dasgupta, Kabir & Solomon, Keisha T., 2018. "Family size effects on childhood obesity: Evidence on the quantity-quality trade-off using the NLSY," Economics & Human Biology, Elsevier, vol. 29(C), pages 42-55.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:otg:wpaper:1315. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Janet Bryant (email available below). General contact details of provider: https://edirc.repec.org/data/etotanz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.