IDEAS home Printed from https://ideas.repec.org/a/spr/hecrev/v1y2011i1p1-810.1186-2191-1991-1-4.html
   My bibliography  Save this article

Healthy vs. unhealthy food: a strategic choice for firms and consumers

Author

Listed:
  • Fernando Antoñanzas
  • Roberto Rodríguez-Ibeas

Abstract

In this paper, we carry out a theoretical analysis of the strategic choice made by firms regarding the type of food they market when they face consumers who care about the healthy/unhealthy attributes of the product but incur in emotional/health costs when the food they consume has unhealthy attributes. We consider a two-stage game. In the first stage, one of the firms chooses the unhealthy content of its product. In the second stage, both firms simultaneously decide their prices. We find that, depending on the parameters of the model, product differentiation can be maximal or less than maximal. The firm that produces the unhealthy food charges a higher price and obtains a larger share of the market unless the emotional/health costs and the unhealthy food production costs are relatively high. We also find that educational campaigns will not always reduce the demand for the unhealthy food or the degree of the unhealthy attribute. JEL Classification:I10, I18, L11 Copyright Antonanzas and Rodriguez-Ibeas; licensee Springer. 2011

Suggested Citation

  • Fernando Antoñanzas & Roberto Rodríguez-Ibeas, 2011. "Healthy vs. unhealthy food: a strategic choice for firms and consumers," Health Economics Review, Springer, vol. 1(1), pages 1-8, December.
    • Handle: RePEc:spr:hecrev:v:1:y:2011:i:1:p:1-8:10.1186/2191-1991-1-4
    DOI: 10.1186/2191-1991-1-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1186/2191-1991-1-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1186/2191-1991-1-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David M. Cutler & Edward L. Glaeser & Jesse M. Shapiro, 2003. "Why Have Americans Become More Obese?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 93-118, Summer.
    2. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    3. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    5. Zheng, Xiaoyong & Zhen, Chen, 2008. "Healthy food, unhealthy food and obesity," Economics Letters, Elsevier, vol. 100(2), pages 300-303, August.
    Full references (including those not matched with items on IDEAS)

    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. George Deltas & Thanasis Stengos & Eleftherios Zacharias, 2011. "Product line pricing in a vertically differentiated oligopoly," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 907-929, August.
    2. Giannakas Konstantinos & Kalaitzandonakes Nicholas & Magnier Alexander & Mattas Konstadinos, 2011. "Economic Effects of Purity Standards in Biotech Labeling Laws," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-47, April.
    3. Bos, Iwan & Marini, Marco A., 2019. "Cartel stability under quality differentiation," Economics Letters, Elsevier, vol. 174(C), pages 70-73.
    4. Sanyal, Amal & Patibandla, Murali, 1999. "From Closed to Contestable Markets: Product Differentiation in Indian Durable Consumer Goods Industry," Working Papers 9-1999, Copenhagen Business School, Department of International Economics and Management.
    5. Justin P. Johnson & David P. Myatt, 2003. "Multiproduct Quality Competition: Fighting Brands and Product Line Pruning," American Economic Review, American Economic Association, vol. 93(3), pages 748-774, June.
    6. Cédric Argenton, 2010. "Exclusive Quality," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 690-716, September.
    7. Stole, Lars A., 2007. "Price Discrimination and Competition," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 34, pages 2221-2299, Elsevier.
    8. Naoto Jinji, 2003. "Strategic policy for product R&D with symmetric costs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(4), pages 993-1006, November.
    9. Langinier Corinne & Babcock Bruce A., 2008. "Agricultural Production Clubs: Viability and Welfare Implications," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-31, December.
    10. C. Benassi & A. Chirco & C. Colombo, 2015. "Beyond the Uniform Distribution: Equilibrium Prices and Qualities in a Vertically Differentiated Duopoly," Working Papers wp1044, Dipartimento Scienze Economiche, Universita' di Bologna.
    11. A. Auer, Raphael & Chaney, Thomas & Sauré, Philip, 2018. "Quality pricing-to-market," Journal of International Economics, Elsevier, vol. 110(C), pages 87-102.
    12. Acharyya, Rajat, 1998. "Monopoly and product quality: Separating or pooling menu?," Economics Letters, Elsevier, vol. 61(2), pages 187-194, November.
    13. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2017. "Horizontal mergers and product quality," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(4), pages 1063-1103, November.
    14. Acharyya, Rajat & García-Alonso, María D.C., 2012. "Income based price subsidies and parallel imports," International Review of Economics & Finance, Elsevier, vol. 22(1), pages 25-41.
    15. Bos, Iwan & Marini, Marco A. & Saulle, Riccardo D., 2020. "Cartel formation with quality differentiation," Mathematical Social Sciences, Elsevier, vol. 106(C), pages 36-50.
    16. L. Colombo & L. Lambertini, 2003. "Dynamic Advertising Under Vertical Product Differentiation," Journal of Optimization Theory and Applications, Springer, vol. 119(2), pages 261-280, November.
    17. Dongmin Yao & Pengyuan Zhang & Xiaoyu Meng, 2023. "How to eliminate the uncovered market: A duopoly model with government intervention," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 631-658, June.
    18. Cellini, Roberto & Siciliani, Luigi & Straume, Odd Rune, 2018. "A dynamic model of quality competition with endogenous prices," Journal of Economic Dynamics and Control, Elsevier, vol. 94(C), pages 190-206.
    19. Emanuele Bacchiega & Antonio Minniti & Arsen Palestini, 2016. "Quality, distance and trade: A strategic approach," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 165-191, March.
    20. Kahina Cherfi-Feroukhi & Said Souam, 2019. "Formal and Informal Interactions in a Duopoly Model," Economics Bulletin, AccessEcon, vol. 39(2), pages 1095-1102.

    More about this item

    Keywords

    Healthy food; Unhealthy food; Obesity; Educational campaigns;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    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:spr:hecrev:v:1:y:2011:i:1:p:1-8:10.1186/2191-1991-1-4. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com/economics/journal/13561 .

    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.