Mixed Strategy Pricing Behaviour in the UK Package Tour Industry
In a market, such as that for package tours, in which products are weakly differentiated and information is fuzzy, consumers may adopt search behaviour such that effectively, they play mixed strategies in the selection of the product that they choose to purchase. Tour operators' best response to this behaviour is mixed strategy pricing. Mixed strategy pricing is likely to mean that the variances of prices will be different at different points during the season for each operator. A simple model is formulated to illustrate the sequence of moves and the behaviour of variances. Brochure data for the summer seasons of 1982 and 1995 is analysed to investigate whether variances differ at different times during the season and thus differ systematically with the level of demand. The weight of evidence generally supports the view that operators adopt mixed strategies when setting brochure prices, even if achieved unconsciously through the application of rules of thumb. Strong evidence is found of the form that one operator, at least, produced a pattern of variances that is statistically significant and that could not result from the method of analysis adopted in the paper or from an ad hoc allocation of its fixed costs.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 5 (1998)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CIJB20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CIJB20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dixon, Huw, 1984. "The existence of mixed-strategy equilibria in a price-setting oligopoly with convex costs," Economics Letters, Elsevier, vol. 16(3-4), pages 205-212.
- Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 1-26.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
When requesting a correction, please mention this item's handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:29-46. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.