Posted by The Situationist Staff on February 9, 2012
Pierre Chandonm and Brian Wansink recently posted their paper “Is Food Marketing Making Us Fat? A Multi-Disciplinary Review” on SSRN. Here’s the abstract.
Whereas everyone recognizes that increasing obesity rates worldwide are driven by a complex set of interrelated factors, the marketing actions of the food industry are often singled out as one of the main culprits. But how exactly is food marketing making us fat? To answer this question, we review evidence provided by studies in marketing, nutrition, psychology, economics, food science, and related disciplines that have examined the links between food marketing and energy intake but have remained largely disconnected. Starting with the most obtrusive and most studied marketing actions, we explain the multiple ways in which food prices (including temporary price promotions) and marketing communication (including branding and nutrition and health claims) influence consumption volume. We then study the effects of less conspicuous marketing actions which can have powerful effects on eating behavior without being noticed by consumers. We examine the effects on consumption of changes in the food’s quality (including its composition, nutritional and sensory properties) and quantity (including the range, size and shape of the packages and portions in which it is available). Finally, we review the effects of the eating environment, including the availability, salience and convenience of food, the type, size and shape of serving containers, and the atmospherics of the purchase and consumption environment. We conclude with research and policy implications.
Download the paper for free here.
Related Situationist posts:
For more on the situation of eating, see Situationist contributors Adam Benforado, Jon Hanson, and David Yosfion’s law review article Broken Scales: Obesity and Justice in America. For a listing of numerousSituaitonist posts on the situational sources of obesity, click here.
Posted in Abstracts, Choice Myth, Deep Capture, Education, Food and Drug Law, Marketing | Tagged: food, market manipulation, Marketing, Obesity | 1 Comment »
Posted by The Situationist Staff on September 18, 2010
In response to Adam Beneforado’s terrific post this week, “Breaking Up Is Easy to Do: When Corporations Dump Consumers,” Situationist friend Tamara Piety wrote another excellent comment, a portion of which we’ve posted below.
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To me, one of most offensive examples of this type of channeling is the price discrimination practice involved in rebate/coupon schemes. Rebates and coupons are used as a way to expand the customer base by attracting a few more customers by virtue of the illusion (for most) of a lower price point. We see it in electronics all the time – “Laptop $999 [with $250 rebate]” There are several things at work here at once. One is that the seller ( or whoever actually pays the rebate) has your money for some period of time ranging from 30 days to 6 months as an interest free loan. Second is the anchoring effect that makes $999 seem some how much less than $1,000. But the principle objection for me is that they are actually creating a staggered pricing program. Again, this might not be a problem if it simply involved selling to as many customers as possible on the basis of the price that they will want to buy. The problem is that in order to do this companies make the process of obtaining the lower price (i.e. the with the rebate price), much more onerous than it appears to be through a variety of devices that are intended to take advantage of the psychological effect of the lower price and then relying on consumer inertia, lack of attention, recalculation of the efforts and so forth to avoid actually making good on that promise. Getting the rebate usually involves fair amount of time and effort (filling out the rebate form, mailing it back, waiting for the check, etc.) and uncertainty (if you fail to observe deadline, miss a requirement in the fine print, fail to send in the original, etc.) you lose. None of these difficulties are simply bureaucratic obstacles which have the ancillary effect of depressing the number of rebates redeemed. They are intended to have this effect. And sometimes the rebate is “paid” in the form of a “gift card” rather than in a cash or check which further draws out the redemption process by providing an expiration date for the card, limitations on where it can be used, or even a restriction limiting its use to other products from the same seller.
Every single step in this process is calculated to generate some failures to complete the redemption process so that the customer doesn’t actually receive the advertised price. And this is seen as a perfectly legitimate set of strategies to maximize the sales of the same good across a range of consumers – from those who don’t care about the rebate, to those who do and intend to redeem and then fail to do so, to those who intend to try redeem and try to do so but fail to successfully jump through all of the hoops of the conditions imposed, to those, finally, who intend to redeem and successfully do so. Some percentage of the last three groups are consumers who presumably wouldn’t have brought the product but for the promised (but in at least two instances) undelivered rebate. And the difference between groups 2 and 3 and group 4 are explained by the seller as being entirely attributable to some character “flaw” (lack of attention, lack of diligence, etc.) or a “choice” not to redeem when that “choice” has been structured to take advantage of consumers’ psychological vulnerabilities (or their dawning realization that the time and effort required to pursue the rebate is not really “free” and thus it might be more rational to abandon the effort.) It is disingenuous and unfair to describe these consumer “choices” as unmediated.
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Bottom line all these tropes – “control,” “choice,” “information,” as they are currently used and understood by many, operate to absolve the seller of any responsibility for their role in driving these choices even as several full-blown, mature industries’ very existence (advertising, marketing, PR) is predicated on the proposition that it is possible to manipulate and channel consumer choices. It is a feat of sleight-of-hand to argue (in essence) that entire industries’ efforts are of no consequence whatsoever even as billions of dollars are spent in plain sight on those efforts.
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To read Piety’s entire comment, click here. Her focus is particularly timely in light of the fact that another Situationist friend, Elizabeth Warren, accepted President Obama’s invitation this week to set up a a consumer financial watchdog and warned yesterday that the time for financial “tricks and traps” was over.
The themes of market manipulation and the “choice myth” are common on the Situationist. In addition to the sample of related posts linked at the bottom of Adam’s post, here are few more: Taking Behavioralism Seriously (Part I) – Abstract and Top Ten List; “Promoting Smoking through Situation” “The Big Game: What Corporations Are Learning About the Human Brain,” “Warren on the Situation of Credit,” “The Financial Squeeze: Bad Choices or Bad Situations?,” “No Contract for Old Men,” “The Situation of Subprime Mortgage Contracts – Abstract.”
The first scholarly article (part of a trilogy) devoted to these issues is Taking Behavioralism Seriously: The Problem of Market Manipulation (74 N.Y.U.L. Rev. 363 (1999)) available for free download on SSRN.
Posted in Behavioral Economics, Choice Myth, Life, Marketing, Public Relations, Situationist Contributors | Tagged: Choice Myth, Elizabeth Warren, markeitng, market manipulation, rebates, Tamara Piety | 1 Comment »
Posted by The Situationist Staff on January 6, 2009
Doug Kysar and Situationist contributor Jon Hanson recently posted on SSRN their important 1999 article, Taking Behavioralism Seriously: The Problem of Market Manipulation (74 N.Y.U.L. Rev. 363) on SSRN. Here is the article’s abstract.
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For the past few decades, cognitive psychologists and behavioral researchers have been steadily uncovering evidence that human decisionmaking processes are prone to nonrational, yet systematic, tendencies. These researchers claim not merely that we sometimes fail to abide by rules of logic, but that we fail to do so in predictable ways.
With a few notable exceptions, implications of this research for legal institutions were slow in reaching the academic literature. Within the last few years, however, we have seen an outpouring of scholarship addressing the impact of behavioral research over a wide range of legal topics. Indeed, one might predict that the current behavioral movement eventually will have an influence on legal scholarship matched only by its predecessor, the law and economics movement. Ultimately, any legal concept that relies in some sense on a notion of reasonableness or that is premised on the existence of a reasonable or rational decisionmaker will need to be reassessed in light of the mounting evidence that humans are “a reasoning rather than a reasonable animal.”
This Article contributes to that reassessment by focusing on the problem of manipulability. Our central contention is that the presence of unyielding cognitive biases makes individual decisionmakers susceptible to manipulation by those able to influence the context in which decisions are made. More particularly, we believe that market outcomes frequently will be heavily influenced, if not determined, by the ability of one actor to control the format of information, the presentation of choices, and, in general, the setting within which market transactions occur. Once one accepts that individuals systematically behave in nonrational ways, it follows from an economic perspective that others will exploit those tendencies for gain.
That possibility of manipulation has a variety of implications for legal policy analysis that have heretofore gone unrecognized. This article highlights some of those implications and makes several predictions that are tested in other work.
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SSRN has just announced its Journal of Behavioral & Experimental Economics and Journal of Behavioral Economics Top Ten lists for papers posted in the last 60 days. Taking Behavioralism Seriously made both lists.
To download the paper for free click here. That link will direct you to the abstract and various download options. To download the companion article, Taking Behavioralism Seriously: Som Evidence of Market Manipulation (112 Harvard L. Rev. 1420) click here. For a sample of related Situationist posts, see “Promoting Smoking through Situation” and “The Situation of Subprime Mortgage Contracts – Abstract.”
Posted in Abstracts, Behavioral Economics, Choice Myth, Legal Theory | Tagged: abstract, behavioralism, biases, Doug Kysar, economic behavioralism, economics, heuristic, Jon Hanson, law and behavioralism, law and economics, manipulation, market manipulation, products liability, top ten | Leave a Comment »
Posted by The Situationist Staff on December 13, 2008
Oren Bar-Gill recently published his interesting paper, “The Law, Economics and Psychology of Subprime Mortgage Contracts” (forthcoming Cornell Law Review, Vol. 94, 2009) on SSRN. Here’s the abstract.
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Over 4 million subprime loans were originated in 2006, bringing the total value of outstanding subprime loans over a trillion dollars. A few months later the subprime crisis began, with soaring foreclosure rates and hundreds of billions, perhaps trillions, of dollars in losses to borrowers, lenders, neighborhoods and cities, not to mention broader effects on the US and world economy. In this Article, I focus on the subprime mortgage contract and its central design features. I argue that these contractual design features can be explained as a rational market response to the imperfect rationality of borrowers. Accordingly, for many subprime borrowers loan contracts were not welfare maximizing. And to the extent that the design of subprime mortgage contracts contributed to the subprime crisis, the welfare loss to borrowers, substantial in itself, is compounded by much broader social costs. Finally, I argue that a better understanding of the market failure that produced these inefficient contracts should inform the ongoing efforts to reform the regulations governing the subprime market.
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For some related Situationist posts, see “The Big Game: What Corporations Are Learning About the Human Brain,” “No Contract for Old Men,” and “Promoting Smoking through Situation.” For a related law review article examining the general interactions of law, economics and psychology, see Jon Hanson & Douglas Kysar, Taking Behavioralism Seriously: The Problem of Market Manipulation (1999), which can be downloaded for free here.
Posted in Abstracts, Behavioral Economics, Choice Myth, Law, Life, Marketing | Tagged: market manipulation, subprime loans | 1 Comment »