On Food Companies Liability for Obesity

Bénédicte Coestier, Estelle Gozlan and Stéphan Marette ()

No 2004/01, Working Papers from INRA, Economie Publique

Abstract: The US food industry faces tobacco-style lawsuits for providing misleading information about health risks linked to the consumption of fatty products. This paper investigates the link between alternative liability rules and the incentive for disclosing health information to consumers. We show that if the expected damage is relatively low, the absence of intervention is socially optimal. If the expected damage is not too high, mandatory labeling is socially optimal. Liability rules are only welfare-enhancing for high levels of risk and/or when consumers misperceive health warnings.

Keywords: Health risk; Information; Liability; Negligence; Regulation (search for similar items in EconPapers)
Date: 2004-06-01
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Citations: View citations in EconPapers (1)

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Journal Article: On Food Companies Liability for Obesity (2005)
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