Packaging of Sin Goods - Commitment or Exploitation?

Julia Nafziger

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: I 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. I ask how fims react to such self-control problems, and possibly exploit them, by offering different package sizes. In a competitive market, either one or three (small, medium and large) packages are offered. In contrast to common intuition, the large, and not the small package is a commitment device. The latter serves to exploit the naive consumer.

Keywords: Quasi-hyperbolic discounting; self-control; consumer behavior; non-linear pricing (search for similar items in EconPapers)
JEL-codes: D03 D11 D49 D86 (search for similar items in EconPapers)
Pages: 16
Date: 2014-01-23
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://repec.econ.au.dk/repec/afn/wp/14/wp14_05.pdf (application/pdf)

Related works:
Journal Article: Packaging of sin goods – Commitment or exploitation? (2016)
Working Paper: Packaging of sin goods - Commitment or exploitation? (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2014-05

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business Economics, Aarhus University
Bibliographic data for series maintained by ().