Do They Have Your Number? Understanding the Moderating Role of Format Effects and Consumer Numeracy for Quantitative Front‐of‐Package Nutrition Claims

Front‐of‐package (FOP) nutrient content claims are often used by food manufacturers to promote the nutrition levels of their products. In this research, two studies examine the influence of the numerical format (either percentages or absolute numbers) presented on FOP‐reduced nutrient content claims and the moderating influence of consumers' numeracy levels (i.e., consumers' ability to interpret numbers). Low numerate consumers are more strongly influenced by the label's numerical format, but results differ across nutrition attributes linked to cardiovascular disease risk. For saturated fat, low numerate consumers had more favorable evaluations of the product that had a label presented in a percent format compared to an absolute unit format. In contrast, the moderating effect of numeracy had little effect on the format of reduced sodium claims. Implications are offered for policymakers, consumer researchers, and food manufacturers .     

An Experimental Assessment of the Effects of Two Alcoholic Beverage Health Warnings Across Countries and Binge-Drinking Status

In recent years, alcohol-related problems on college campuses have been well documented. This research examines how two different alcoholic beverage health warnings placed on the label of a fictitious brand of beer influence alcohol-related risk perceptions, attitudes and intentions, and characterizations of problem-drinking behaviors of binge and non-binge drinkers in Australia and the United States. The consumer welfare implications of our findings, which show that the dependent measures are influenced by both main and interaction effects, are discussed.     

When Will Mean-Variance Efficient Portfolios Be Well Diversified?

We characterize the conditions under which efficient portfolios put small weights on individual assets. These conditions bound mean returns with measures of average absolute covariability between assets. The bounds clarify the relationship between linear asset pricing models and well-diversified efficient portfolios. We argue that the extreme weightings in sample efficient portfolios are due to the dominance of a single factor in equity returns. This makes it easy to diversify on subsets to reduce residual risk, while weighting the subsets to reduce factor risk simultaneously. The latter involves taking extreme positions. This behavior seems unlikely to be attributable to sampling error.     

Bargaining by Limiting Cooperation: Withholding Consent for the Level of a Public Good

This paper analyzes how the ability to limit cooperation influences the outcome of complete information bargaining between two players. When cooperation involves prompt resolution of a conflict, as in alternating-offer games and wars-of-attrition, the solutions equate the marginal rates of substitution between earlier resolution and more private goods. When cooperation involves consent for the level of a public good, the outcome again equates the marginal rates of substitution between greater cooperation (more public good) and more private goods (lower cost shares). Here, the equilibrium consists of balanced linear cost shares given by the ratio of marginal-willingness-to-pay to marginal cost.