My favorite anthropologist, Grant McCracken, offers a detailed review. The description on the packet reads as follows:
It doesn’t take an econ Ph.D. to brew tea—but Barry has one and sometimes it actually helps. Here’s how. Sugar, like most goods, has a declining marginal utility. One teaspoon takes away tea’s bitterness. Another adds a nice sweetness. That’s where we stop. More sugar add calories but not much more taste. By the time you’ve got teaspoons per serving, it’s liquid candy. Green dragon Tea is organic and just a tad sweet. Honestly yours, Seth and Barry.
Kudos to Nalebuff -- how many other game theorists have succeeded with commercial products?
Addendum: One Swathmore student -- Randy Goldstein -- tells me this further story about the tea...
"The label of Barry Nalebuff’s, Honest Tea, which is sold on my campus, had the economics department up in arms last year. I don’t have one in front of me, but in addition to the quote you shared, the label contains a graph plotting taste (total quality or utility in a sense, I guess) on the y-axis and sugar (presumably the only important input to the manufacturers) on the x-axis. The graph is parabolic, revealing an increasing marginal product of sugar up to a point, and then a diminishing marginal product all the way down to the x-axis. The manufacturer puts the competition way down past peak, as one might expect. However, the manufacturer plots Honest Tea just BEFORE the peak of the curve. That is, it seems they do not use sufficient sugar to maximize taste by their own standards."
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