Article ID Journal Published Year Pages File Type
7242867 Journal of Economic Behavior & Organization 2016 13 Pages PDF
Abstract
We consider the shopping and consumption decision of an individual with a self-control problem. The consumer believes that restricting the consumption of a sinful product (such as chips) is in his long-run interest. But when facing the actual decision he is tempted to overeat. We ask how firms react to such self-control problems, and possibly exploit them, by offering different package sizes. In a competitive market, either one or three package sizes are offered. In contrast to common intuition, the large, and not the small package might be a commitment device. The latter may serve to exploit the naive consumer.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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