Shoppers pay a premium to avoid seafood fraud, study finds
Food Fraud
If you've ever wondered whether that 'wild-caught' label on your fish or the 'organic' sticker on your garden starts is worth the extra cost, this research explains the psychology behind why we're willing to pay more for trust.
Researchers ran experiments where people bid real money on seafood, not knowing for sure if they'd get the high-quality fish they wanted or a cheaper substitute. They found that people will pay a noticeable price premium just to guarantee they're getting the authentic, labeled product, and that people update their beliefs about food honesty differently depending on whether the news is good or bad, and whether it comes from experts or fellow consumers.
Key Findings
Consumers are willing to pay a measurable price premium to purchase a fully authentic PDO (protected designation of origin) fish product and avoid food fraud.
Bidding behavior in auction experiments (BDM and Vickrey auctions) often deviates from standard Expected Utility Theory predictions when risk and ambiguity are involved.
Consumers update their beliefs about food authenticity differently depending on whether information comes from other consumers versus experts, and whether the news is perceived as good or bad.
chevron_right Technical Summary
This economics thesis studies how shoppers decide what to pay for food when they're worried about fraud, like fake seafood labeled as a premium catch, and finds people will pay extra to avoid getting scammed.
Abstract Preview
Original paper
Consumers' purchasing behaviour under risk and uncertainty: three essays on food authenticity
This thesis explores consumers’ purchasing behaviour under risk and uncertainty. Specifically, the role of subjective beliefs, risk and ambiguity attitudes, and information. I focus on food purchas...
open_in_new Read full abstractAbstract copyright held by the original publisher.
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