Smoking Bans in the Presence of Social Interaction

Bauer, Christian and Lingens, Jörg (4. May 2009): Smoking Bans in the Presence of Social Interaction. Discussion Papers in Economics 2009-7

Abstract

This paper analyzes the welfare effects of a public smoking ban in bars. We construct a model that captures crucial features of bar life: competing bars, social interaction, and heterogenous preferences for a smoking ban. Smokers and non-smokers simultaneously choose a bar given their preferences for meeting other people. Bars anticipate the behavior of individuals and choose the smoking regime strategically. Since the (dis)utility from smoking and social interaction are substitutes, the smoking regime is a stronger coordination device if the disutility from smoking is large. If all bars allow smoking in equilibrium, a public smoking ban enhances welfare.

• Item Type: Paper
• Keywords: Smoking Ban, Social Interaction, Coordination Game
• Faculties: Economics; Economics > Munich Discussion Papers in Economics
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: L13, I18, D61
• Language: English

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