Packaging of sin goods - Commitment or exploitation?

Else Gry Bro Christensen and Julia Nafziger

Munich Reprints in Economics from University of Munich, Department of Economics

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. (C) 2015 Elsevier B.V. All rights reserved.

Date: 2016
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Published in Journal of Economic Behavior & Organization 122(2016): pp. 62-74

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Related works:
Journal Article: Packaging of sin goods – Commitment or exploitation? (2016)
Working Paper: Packaging of Sin Goods - Commitment or Exploitation? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:43476

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