An Experimental Evaluation of a Portion Cap Rule with a Two-Product Seller

Published:

Portion cap rules have been proposed to regulate the consumption of foods and ingredients deemed unhealthy. Theoretical work suggests that, when bundling is used to price-discriminate, consumers are not necessarily affected by these measures, and some may even benefit. The claim assumes that the seller strictly adheres to perfect profit-maximizing strategies. I relax this premise in a controlled experiment where two-product sellers serve buyers with private preferences. Subjects can design and price their menus as they wish. The data largely corroborate the predicted theoretical impacts on consumer surplus, speaking to their robustness: one consumer segment prefers the capped environment. Download the working paper here