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The impact of riverboat casinos on the demand for gambling at casino resorts: a theoretical and empirical investigation

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  • Julie Hunsaker

    (Department of Economics, Wayne State University, Detroit, MI, USA)

Abstract

We provide conditions under which a casino resort enjoys an increase in demand following the entry of a riverboat casino in a separate geographical market. Gambling is modeled as an 'experience good', whereby consumers are uncertain of the benefit they will receive from the activity prior to engaging in it. The riverboat casino provides nearby consumers with the opportunity to experience gambling without having to incur large transportation costs. Those consumers who discover that they enjoy gambling travel to the casino resort for a vacation next period. Our theoretical results are supported by empirical evidence for casinos in Las Vegas. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Julie Hunsaker, 2001. "The impact of riverboat casinos on the demand for gambling at casino resorts: a theoretical and empirical investigation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(1-3), pages 97-111.
  • Handle: RePEc:wly:mgtdec:v:22:y:2001:i:1-3:p:97-111
    DOI: 10.1002/mde.1000
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    References listed on IDEAS

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    1. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    2. Gabszewicz, Jean & Pepall, Lynne & Thisse, Jacques-Francois, 1992. "Sequential Entry with Brand Loyalty Caused by Consumer Learning-by-Using," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 397-416, December.
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    Cited by:

    1. Juin-Jen Chang & Ching-Chong Lai & Ping Wang, 2004. "On the Public Economics of Casino Gambling," IEAS Working Paper : academic research 04-A005, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    2. Richard Thalheimer & Mukhtar M. Ali, 2008. "The Demand For Casino Gaming With Special Reference To A Smoking Ban," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 273-282, April.

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