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Firm behavior in a legal market with addiction: implications from a demand with social interactions
[Le comportement des producteurs de biens addictifs légaux : implications d'une demande avec interactions sociales]

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  • Sophie Massin

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article analyzes the behavior of a producer of a legal addictive good (tobacco, alcohol or gambling) facing a demand with social interactions, especially a deterrence effect of heavy use on initiation. We simulate an epidemic model to estimate at what conditions it could be interesting for him to act responsibly, which means to reduce the escalation rate (from light use to heavy use). We draw conclusions in terms of the debate on corporate social responsibility discourse/practice in a neoclassical perspective.

Suggested Citation

  • Sophie Massin, 2009. "Firm behavior in a legal market with addiction: implications from a demand with social interactions [Le comportement des producteurs de biens addictifs légaux : implications d'une demande avec inte," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00375546, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00375546
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00375546
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    References listed on IDEAS

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    1. Carl Shapiro, 1982. "Consumer Information, Product Quality, and Seller Reputation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 20-35, Spring.
    2. Saffer, Henry & Chaloupka, Frank, 2000. "The effect of tobacco advertising bans on tobacco consumption," Journal of Health Economics, Elsevier, vol. 19(6), pages 1117-1137, November.
    3. Roberts, Robin W., 1992. "Determinants of corporate social responsibility disclosure: An application of stakeholder theory," Accounting, Organizations and Society, Elsevier, vol. 17(6), pages 595-612, August.
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