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‘Should I stay or should I go?’

Author

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  • Lorenzo Zirulia

    (University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy; ICRIOS-Bocconi University, Italy)

Abstract

The aim of this article is to model the decisions of tourists and a monopolist firm when weather forecasts are available. Before deciding whether to go on holiday or not, but after the firm has decided and posted its price, tourists can look at weather forecasts. Our results show that the price chosen by the firm and the corresponding equilibrium profit are decreasing as a function of the accuracy of weather forecasts. Consumers, instead, are better off, the more accurate weather forecasts become. Managerial and policy implications are also derived.

Suggested Citation

  • Lorenzo Zirulia, 2016. "‘Should I stay or should I go?’," Tourism Economics, , vol. 22(4), pages 837-846, August.
    • Handle: RePEc:sae:toueco:v:22:y:2016:i:4:p:837-846
    DOI: 10.1177/1354816616654256
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    References listed on IDEAS

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