Abstract

In the debate over increasing obesity rates, fingers are often pointed at "big food" and their marketing practices. It is noted that restaurant meals are often larger than home-cooked meals and that portion sizes in restaurants have dramatically increased over the past few years. We investigate the issue by considering "socially optimal" -- rather than decentralized profit maximizing -- portions in restaurants to see whether welfare maximizing strategies may also be waistline-increasing. We demonstrate that "socially optimal" restaurant meals are larger in size than average home-cooked meals and, while many agents chose to "super-size", the option of super-sizing actually alleviates the size discrepancy between home-cooked and restaurant meals. Moreover, "socially optimal" portion sizes at home and in restaurants increase with relative reductions in the marginal costs and/or relative increases in the fixed costs of meal preparation. Given this cost structure, when offered fries a greater proportion of the population will answer with an enthusiastic "yes"!