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- Publisher
- Oxford University Press
- Copyright
- © 2008 by JOURNAL OF CONSUMER RESEARCH, Inc.
- ISSN
- 0093-5301
- eISSN
- 1537-5277
- DOI
- 10.1086/587631
- Publisher site
- See Article on Publisher Site
Abstract
This article illustrates how the compromise effect alters consumers' selection of soft drinks. Using three within-subject studies, we show that extremeness aversion and price insensitivity cause consumers to increase their consumption when the smallest drink size is dropped or when a larger drink size is added to a set. As a result rational firms find it best to drop the smaller sizes and add a larger size, thus increasing overall consumption. After estimating each individual's demand as a function of price and drink size availability, policy experiments demonstrate how it is possible to reduce soft drink consumption without additional taxation.
Journal
Journal of Consumer Research – Oxford University Press
Published: Oct 1, 2008
Keywords: Health, Nutrition, Safety; Situation/Context Issues; Public Policy Issues; Optimization; Conjoint Analysis