Group Consumption and Product Diversity : The Case of Smoking Bans

Foucart, R. (2017) Group Consumption and Product Diversity : The Case of Smoking Bans. Journal of Industrial Economics, 65 (3). pp. 559-584. ISSN 0022-1821

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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:
Journal Article
Journal or Publication Title:
Journal of Industrial Economics
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. Journal of Industrial Economics. doi: 10.1111/joie.12137 which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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Deposited On:
02 Sep 2019 14:50
Last Modified:
22 Nov 2023 00:41