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

Julie Hunsaker
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Julie Hunsaker: Department of Economics, Wayne State University, Detroit, MI, USA, Postal: Department of Economics, Wayne State University, Detroit, MI, USA

Managerial and Decision Economics, 2001, vol. 22, issue 1-3, 97-111

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.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:22:y:2001:i:1-3:p:97-111

DOI: 10.1002/mde.1000

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