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Research Note: A Nash Bargaining Model for Average Daily Rates

Author

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  • Chih-Min Pan

    (Department of Applied Economics, National Chia-Yi University, No 151 Lin-Shen East Road, Chia-Yi City 600, Taiwan, ROC)

Abstract

This paper develops a Nash bargaining model to study the average daily rate per rented hotel room. It then examines the model with data from international tourist hotels in Taipei, Taiwan. The empirical results indicate that: (1) an increase in the percentage of rented rooms taken by independent travellers (the independent traveller ratio) could significantly raise the average daily rate; (2) the average daily rate paid by independent travellers is significantly higher than that paid by group travellers; and (3) any improvement of hotel operators' relative bargaining power in relation to independent or group travellers will significantly raise hotels' average daily rates.

Suggested Citation

  • Chih-Min Pan, 2006. "Research Note: A Nash Bargaining Model for Average Daily Rates," Tourism Economics, , vol. 12(3), pages 469-474, September.
    • Handle: RePEc:sae:toueco:v:12:y:2006:i:3:p:469-474
    DOI: 10.5367/000000006778493655
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    References listed on IDEAS

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    1. Kauf, Teresa L., 1999. "Price discrimination and bargaining power in the U.S. vaccine market: Implications for childhood immunization policy," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(2), pages 249-265.
    2. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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    Cited by:

    1. Arenoe, Bjorn & van der Rest, Jean-Pierre I. & Kattuman, Paul, 2015. "Game theoretic pricing models in hotel revenue management: An equilibrium choice-based conjoint analysis approach," Tourism Management, Elsevier, vol. 51(C), pages 96-102.

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