Abstract
The supersizing phenomenon where menu prices for large fast food portions appear to be well below their marginal production costs is of considerable scholarly and policy interest. This article develops sufficient conditions under which a firm can separate two different consumer types while maximizing and capturing the total surplus associated with marginal-cost pricing. This strategy creates a perceived supersizing discount even though the firm does not actually sell the additional quantity below marginal cost. With public health interest in reducing portion sizes, we introduce the right-to-split as a policy alternative that breaks the separating equilibrium and leads to smaller quantities.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
