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Committed and Non-committed Policy Regimes in a Sequential Mixed Hotel Duopoly

In: Transcending Borders in Tourism Through Innovation and Cultural Heritage

Author

Listed:
  • Flávio Ferreira

    (Polytechnic Institute of Porto)

  • Fernanda A. Ferreira

    (Polytechnic Institute of Porto)

  • Paula Odete Fernandes

    (Instituto Politécnico de Bragança)

Abstract

This paper highlights the effects of corporate social responsibility (CSR) on the strategic choice of pollution abatement and on the timing of the government’s commitment to the environmental tax policy, in the hotel industry. To do this, we consider a competition between one consumer-friendly hotel and one for-profit hotel, and two policy regimes (commitment and non-commitment), with two different timings of the government’s decision about environmental taxation. Hotels choose pollution abatement investments sequentially and outputs simultaneously. We show that with a high degree of consumer-friendliness, the committed environmental tax is lower than the non-committed one. We also show that although the environmental damage may be less under the non-committed policy regime, social welfare is always better under the committed policy regime. In addition, we examine the changes in the degree of CSR on the equilibrium results.

Suggested Citation

  • Flávio Ferreira & Fernanda A. Ferreira & Paula Odete Fernandes, 2022. "Committed and Non-committed Policy Regimes in a Sequential Mixed Hotel Duopoly," Springer Proceedings in Business and Economics, in: Vicky Katsoni & Andreea Claudia Şerban (ed.), Transcending Borders in Tourism Through Innovation and Cultural Heritage, pages 91-103, Springer.
    • Handle: RePEc:spr:prbchp:978-3-030-92491-1_5
    DOI: 10.1007/978-3-030-92491-1_5
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    More about this item

    Keywords

    Pollution abatement; Commitment; Environmental policy; Consumer-friendly hotel;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Z30 - Other Special Topics - - Tourism Economics - - - General

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