Answers are grounded in this paper and cite their sources.
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.
No takes yet. Share an insight, caveat, or question.
Julie Hunsaker (2001) studied this question.
Synapse has enriched 5 related papers. Consider them for comparative context: