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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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Group Consumption and Product Diversity
T2 - The Case of Smoking Bans
AU - Foucart, R.
N1 - 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.
PY - 2017/9/1
Y1 - 2017/9/1
N2 - 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.
AB - 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.
U2 - 10.1111/joie.12137
DO - 10.1111/joie.12137
M3 - Journal article
VL - 65
SP - 559
EP - 584
JO - Journal of Industrial Economics
JF - Journal of Industrial Economics
SN - 0022-1821
IS - 3
ER -