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Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/1455

Title: A Game-theoretic Approach to Choice of Profit and Revenue Maximization Strategies in Tourism Supply Chains for Package Holidays
Authors: Yang, Shu
Huang, George Q.
Song, Haiyan
Liang, Liang
Subjects: Tourism supply chain
Package holidays
Game theory
Profit maximization
Revenue maximization
Issue Date: 2008
Publisher: Haworth Press (Routledge)
Citation: Journal of China Tourism Research, 2008, v. 4, no. 1, p. 45-60.
Abstract: Enterprises in a tourism supply chain (TSC) often optimize their businesses by adopting and operating profit or revenue maximization strategies. This article investigates the conditions under which these strategies are preferred. We consider a TSC consisting of three sectors: a theme park operator, tour operators, and accommodation providers. Simultaneous non-cooperative games are used as decision models of individual enterprises within the same sector, while a two-stage sequential game is used to coordinate tourist quantities between the three sectors that form the two layers at the TSC. The theme park determines the admission price, while the accommodation sector achieves market clearing prices through quantity competition. Afret learning the decisions of the theme park and the accommodation sector. the tour operator sector decides final price of package holiday through quantity competition. Several observations are derived from equilibrium solutions. First, tour operators and accommodation providers that select the revenue maximization strategy obtain larger market shares and profits than those that select the profit maximization strategy, while the theme park operator generally prefers enterprises in the other two sectors to select the revenue maximization strategy. Second, the profit maximization strategy is a better choice when all enterprises in each of the sectors choose the same strategy. Finally, if tour operators and accommodation providers are free to choose their own strategies, there is a market equilibrium where profit and revenue maximization strategies can coexist.
Description: DOI: 10.1080/19388160802099709
Rights: Copyright © 2008 by The Haworth Press.
This is an electronic version of an article published in S. Yang et. al. (2008), Journal of China Tourism Research, 4(1), 45-60. Journal of China Tourism Research is available online at http://www.informaworld.com/smpp/ and the open URL of the article: http://www.informaworld.com/smpp/content~db=all?content=10.1080/19388160802099709.
Type: Journal/Magazine Article
URI: http://hdl.handle.net/10397/1455
ISSN: 1938-8160
Appears in Collections:SHTM Journal/Magazine Articles

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