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Comments on: Fast food and health standards http://www.tvhe.co.nz/2007/07/27/fast-food-and-health-standards/ The Visible Hand in Economics Sun, 29 Jul 2007 23:56:30 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2007/07/27/fast-food-and-health-standards/#comment-79 Sun, 29 Jul 2007 23:56:30 +0000 http://tvhe.wordpress.com/2007/07/27/fast-food-and-health-standards/#comment-79 I agree that the using the word game was inappropriate, as their is only one player. I didn’t really mean it in a strict sense, I just wanted people to get the feeling it was something you do over and over, and in the 5 mins I had to write it, repeated game was the only way I could think of saying it. It is just a search problem that stems from that market imperfection of imperfect information.

]]> By: rauparaha http://www.tvhe.co.nz/2007/07/27/fast-food-and-health-standards/#comment-78 Sun, 29 Jul 2007 23:06:17 +0000 http://tvhe.wordpress.com/2007/07/27/fast-food-and-health-standards/#comment-78 I don’t think we’re disagreeing, Steve. I agree that you can use optimal search theory to analyse this problem, as you suggest. I just don’t think that game theory is useful here. I don’t think that the food court acts strategically with respect to the consumer: they are more like an oligopolist.

]]> By: Matt Nolan http://www.tvhe.co.nz/2007/07/27/fast-food-and-health-standards/#comment-77 Sun, 29 Jul 2007 21:03:41 +0000 http://tvhe.wordpress.com/2007/07/27/fast-food-and-health-standards/#comment-77 I think it is a mix of both. I didn’t want to put Hamilton down by saying it had lower food quality though 😉

However, now I’m hungry, gotta eat something

]]> By: SD http://www.tvhe.co.nz/2007/07/27/fast-food-and-health-standards/#comment-76 Sun, 29 Jul 2007 04:56:14 +0000 http://tvhe.wordpress.com/2007/07/27/fast-food-and-health-standards/#comment-76 I think that’s kinda what Matt’s saying…

The payoff of searching will be higher if it’s a repeated game, because the information you acquire will can be used repeatedly in the future. Thus the net benefit of searching is something like: [probability of finding a better fast food establishment] X [premium of quality over McDonalds] X [1 + number of future purchases] – [cost of searching].

In Hamilton the number of future purchases = 0, because lets be honest, you never want to go to the Tron more than once. So the net benefit of searching is smaller.

]]> By: rauparaha http://www.tvhe.co.nz/2007/07/27/fast-food-and-health-standards/#comment-75 Fri, 27 Jul 2007 09:48:30 +0000 http://tvhe.wordpress.com/2007/07/27/fast-food-and-health-standards/#comment-75 I dunno about the repeated game theory: this sounds more like an optimal search problem than a game to me. The optimal search strategy will dictate that you continue to try new places if both the probability that the new place is really good is high enough, and your satisfaction with your current eatery is low enough. I think this is more a case of you having different beliefs about the chances that the local vendors are high quality depending upon the town you’re in. Wellington’s foodcourt sellers are likely higher quality, on average, than Hamilton’s so the payoff from trying new ones is lower in Hamilton. I think that’s plausible even if it doesn’t say much about your faith in Hamilton’s dining establishments.

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