Fast food, addiction, and market power

  • Richards T
  • Patterson P
  • Hamilton S
  • 6

    Readers

    Mendeley users who have this article in their library.
  • 8

    Citations

    Citations of this article.

Abstract

Many attribute the rise in obesity since the early 1980s to the overconsumption of fast food. A dynamic model of a differentiated-product industry equilibrium shows that a firm with market power will price below marginal cost in a steady-state equilibrium. A spatial hedonic pricing model is used to test whether fast food firms set prices in order to exploit their inherent addictiveness. The results show that firms price products dense in addictive nutrients below marginal cost, but price products high in nonaddictive nutrients higher than would be the case in perfect competition.

Author-supplied keywords

  • Addiction
  • Brand loyalty
  • Fast food
  • Generalized method of moments
  • Hedonic pricing
  • Nutrients
  • Shadow values

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Get full text

Authors

  • Timothy J. Richards

  • Paul M. Patterson

  • Stephen F. Hamilton

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free