Group consumption and product diversity: the case of smoking bans

Foucart, Renaud (2017) Group consumption and product diversity: the case of smoking bans. Journal of Industrial Economics, 65 (3). pp. 559-584. ISSN 1467-6451

[img] PDF - Repository staff only until 30 September 2019. - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Download (244kB)

Abstract

I study product diversity in the presence of search costs and groups of consumers. Groups with heterogeneous tastes create a leverage effect on competition: a large majority of firms may end up offering a product that corresponds to the taste of the minority. I illustrate this idea with smoking bans in bars and restaurants. When the first nonsmoking restaurants opened, there were few of them with little competition and high market power on nonsmokers. By extracting a large surplus from nonsmokers, nonsmoking restaurants became unattractive to other groups, while smoking restaurants were plenty and competitive, attracting both smokers and mixed groups.

Item Type: Article
Additional Information: This is the peer reviewed version of the following article: Foucart, R. (2017), Group Consumption and Product Diversity: The Case of Smoking Bans. J Ind Econ, 65: 559–584. doi:10.1111/joie.12137, which has been published in final form at https://doi.org/10.1111/joie.12137. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > Nottingham University Business School
Identification Number: 10.1111/joie.12137
Depositing User: Eprints, Support
Date Deposited: 07 Feb 2018 11:21
Last Modified: 08 Feb 2018 10:05
URI: http://eprints.nottingham.ac.uk/id/eprint/49621

Actions (Archive Staff Only)

Edit View Edit View