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Free Walking Tours: A Game Theoretical Approach

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  • Yizhaq Minchuk
  • Baruch Keren

Abstract

Free guided walking tours are becoming increasingly common in cities that are popular tourist destinations. We use game theoretical tools to model and analyze the competition between several tour operators competing in one destination. The model consists of two stages: In the first, each operator decides on the level of effort to invest in order to attract tourists to its free tour. This effort includes advertising and marketing, primarily by means of digital platforms and social networks. At the same time, and still in the first stage, each operator decides on the level of effort to invest in the walking tour itself to make it an enjoyable experience for the participants. In the second stage, based only on the effort invested in the tour itself, the participants decide how much to tip. The model generates several theoretical and practical insights into the organization of free tours.

Suggested Citation

  • Yizhaq Minchuk & Baruch Keren, 2025. "Free Walking Tours: A Game Theoretical Approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(8), pages 4374-4381, December.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:8:p:4374-4381
    DOI: 10.1002/mde.70024
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    References listed on IDEAS

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    1. Marta Disegna & Linda Osti, 2016. "Tourists' Expenditure Behaviour: The Influence of Satisfaction and the Dependence of Spending Categories," Tourism Economics, , vol. 22(1), pages 5-30, February.
    2. Azar, Ofer H., 2004. "What sustains social norms and how they evolve?: The case of tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 49-64, May.
    3. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    4. Wenqian Zhang & Haiyan Wang, 2024. "To allow or not to allow tipping: tipping strategy choice for service platforms under competition," International Journal of Production Research, Taylor & Francis Journals, vol. 62(23), pages 8462-8484, December.
    5. Britta Butz & Christine Harbring, 2022. "Tipping for charity: a field experiment in charitable giving on free walking tours," Journal of Business Economics, Springer, vol. 92(5), pages 781-808, July.
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