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    Rights statement: This is the peer reviewed version of the following article: Foucart, R. (2017), Group Consumption and Product Diversity: The Case of Smoking Bans. Journal of Industrial Economics. doi: 10.1111/joie.12137 which has been published in final form at https://onlinelibrary.wiley.com/doi/full/10.1111/joie.12137 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

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Group Consumption and Product Diversity: The Case of Smoking Bans

Research output: Contribution to journalJournal articlepeer-review

Published
<mark>Journal publication date</mark>1/09/2017
<mark>Journal</mark>Journal of Industrial Economics
Issue number3
Volume65
Number of pages26
Pages (from-to)559-584
Publication StatusPublished
<mark>Original language</mark>English

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. 

Bibliographic note

This is the peer reviewed version of the following article: Foucart, R. (2017), Group Consumption and Product Diversity: The Case of Smoking Bans. Journal of Industrial Economics. doi: 10.1111/joie.12137 which has been published in final form at https://onlinelibrary.wiley.com/doi/full/10.1111/joie.12137 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.