Investment in Tourism Market: A Dynamic Model of Differentiated Oligopoly
AbstractWe present a theoretical dynamic model in tourism economics, assuming that the market for tourism is an oligopoly with differentiated products. Destinations can invest in order to improve their stock of physical, natural or cultural resources. Tourism flows yield current revenues, but they are usually detrimental for the stock of resources. We find the solution of the dynamic model, and in particular we find the open-loop Nash equilibrium of the game among destinations, under alternative settings, depending on whether the degree of differentiation among destinations is exogenous or endogenous. In particular, under the latter case, an increase of the number of destinations leads to a higher degree of product differentiation in steady state. Copyright Springer Science+Business Media, Inc. 2006
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 35 (2006)
Issue (Month): 1 (September)
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Web page: http://www.springerlink.com/link.asp?id=100263
differential games; reservation price; tourism; D43; D92; L83;
Other versions of this item:
- Roberto Cellini & Guido Candela, 2004. "Investment in Tourism Market: A Dynamic Model of Differentiated Oligopoly," Working Papers 2004.20, Fondazione Eni Enrico Mattei.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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