Question

Use utility theory to describe why children like candy more than money?

Answer 1

If an economist believes that kids get some "the chase" benefit, or at least that it's pricey for kids to keep going to houses for as long as they're allowed, so the outcome is that kids get as much candy as they're given, no matter how much or how little they want it. When children end up with a lot of sweets, often parents are worried with the safety implications involved with consuming it all. An innovative effort to deal with children having sweets while minimizing their intake has come from a very innovative initiative where dentists are promising to purchase Halloween candy from their patients.

By giving a cash reward, thesedentists agree that children would be willing to receive as much candy as possible, but maybe their intake can be improved if they are offered more opportunities than just "healthier teeth" apromise. Most psychologists will look at this system and think about how their promoters are attempting to incentivize children by the the payoff of a less attractive option. Economists are developing models on the frontier of current research to analyze the fairest and most efficient way to do this

Many analysts may also argue that the purpose of this initiative is to change the desires of a child so that in the future she will make better (healthier) choices. Still, however, software capacity to adjust priorities is an open issue in economic analysis