Template-Type: ReDIF-Paper 1.0


Author-Name: Christian Bauer
Author-X-Name-First: Christian
Author-X-Name-Last: Bauer

Author-Name: Jörg Lingens
Author-X-Name-First: Jörg
Author-X-Name-Last: Lingens


Title: The Strategic Effects of Smoking Bans
	
Abstract: 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.
Length:  15 pages
Creation-Date:  2008-06
File-URL: http://www.bgpe.de/texte/DP/055_bauer_lingens.pdf
File-Format: Application/pdf
File-Function: First version, 2008
Number: 055
Classification-JEL: L13, I18, D61
Keywords: Smoking Ban, Endogenous Product Differentiation
Handle: RePEc:bav:wpaper:055_bauer_lingens