Abstract
In 2012, the New York City Board of Health prohibited restaurants from selling sugary drinks in containers that would hold more than 16 oz. Although a state court ruled that the Board of Health did not have the authority to implement such a policy, it remains a legally viable option for governments and a voluntary option for restaurants. However, there is very limited empirical data on how such a policy might affect the purchasing and consumption of sugary drinks. We report four well-powered, incentive-compatible experiments in which we evaluated two possible ways that restaurants might comply with such a policy: bundling (i.e., dividing the contents of oversized cups into two regulation-size cups) and providing free refills (i.e., offering a regulation-size cup with unlimited refills). Bundling caused people to buy less soda. Free refills increased consumption, especially when a waiter served the refills. This perverse effect was reduced in self-service contexts that required walking just a few steps to get a refill.
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