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On the Stackelberg game model of the collaboration of a hotel and third-party booking websites

Author

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  • C. I. Chiang

    (Hsuan Chuang University)

  • Y. H. Cheng

    (Hsuan Chuang University)

Abstract

This study aims to apply the bi-level game theory model to explore how a hotel collaborates with third-party websites to determine the optimal room rate and the number of overbooking to maximize the hotel’s total profit. The results show that the proposed bi-level game model not only can provide optimal room rate and the number of overbooking to the hotel but also the marketing efforts to third-party websites. The optimal room rate is significantly affected by the arrival rate and the hotel's marketing efforts; however, the compensation rate does not influence room rate and the number of overbooking.

Suggested Citation

  • C. I. Chiang & Y. H. Cheng, 2022. "On the Stackelberg game model of the collaboration of a hotel and third-party booking websites," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(1), pages 97-105, February.
    • Handle: RePEc:pal:jorapm:v:21:y:2022:i:1:d:10.1057_s41272-021-00283-5
    DOI: 10.1057/s41272-021-00283-5
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    References listed on IDEAS

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    1. Peng Liao & Fei Ye & Giri Kumar Tayi & Xiande Zhao, 2015. "Competition and coordination in online and offline hotel distribution channels under commission override model," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 8(2), pages 193-217.
    2. Li, Susan X. & Huang, Zhimin & Zhu, Joe & Chau, Patrick Y. K., 2002. "Cooperative advertising, game theory and manufacturer-retailer supply chains," Omega, Elsevier, vol. 30(5), pages 347-357, October.
    3. Varda Liberman & Uri Yechiali, 1978. "On the Hotel Overbooking Problem--An Inventory System with Stochastic Cancellations," Management Science, INFORMS, vol. 24(11), pages 1117-1126, July.
    4. Catalano, Mario & Migliore, Marco, 2014. "A Stackelberg-game approach to support the design of logistic terminals," Journal of Transport Geography, Elsevier, vol. 41(C), pages 63-73.
    5. Yufeng Dong & Liuyi Ling, 2015. "Hotel Overbooking and Cooperation with Third-Party Websites," Sustainability, MDPI, vol. 7(9), pages 1-17, August.
    6. Xiaolong Guo & Lina He, 2012. "Tourism Supply-Chain Coordination: The Cooperation between Tourism Hotel and Tour Operator," Tourism Economics, , vol. 18(6), pages 1361-1376, December.
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    Cited by:

    1. Feng, Fenling & Zhang, Jiaqi & Liu, Chengguang, 2023. "Integrated pricing mechanism of China Railway Express whole-process logistics based on the Stackelberg game," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 609(C).

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