The Strategic Effects of Smoking Bans

Arbeitspapier

We analyse the welfare effects of a publicly imposed smoking ban in privately owned places like bars. In an economy where households have heterogenous (positive and negative) attitudes towards smoking bans, bars can use the smoking regime choice as a strategic variable. In doing so, bars may endogenously implement a product differentiation. Focusing on the possibility to separate markets, we derive the Nash equilibrium of the decentral economy in a setting in which duopoly bars compete in capacity and choose the smoking regime. We show how the smoking regime choice is a function of the heterogeneity of households. Moreover, we show that the social planer implements the smoking regime obtained in the decentral economy. As such, imposing smoking bans is welfare decreasing in an economy in which bar landlords chose to allow smoking.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: BGPE Discussion Paper ; No. 55

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Health: Government Policy; Regulation; Public Health ; Allocative Efficiency; Cost-Benefit Analysis
• Subject: Smoking Ban ; Endogenous Product Differentiation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bauer, Christian ; Lingens, Jörg
• Event: Veröffentlichung
• (who): Friedrich-Alexander-Universität Erlangen-Nürnberg, Bavarian Graduate Program in Economics (BGPE)
• (where): Nürnberg
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/73381
• Last update: 10.03.2025, 11:42 AM CET