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Chaos in the tourism industry


  • Correani, Luca
  • Garofalo, Giuseppe


The paper presents an application of the chaos theory to tourism, a sector in which operators' choices are particularly elaborate and complex. The dynamics of the tourist industry are, in fact, the result of close interactions between units of production, tourist flows, local authorities and natural resources. These interactions do not necessarily lead to a regular trend in the development of the tourist industry as proposed by Butler; on the contrary, irregularities of various types are very possible. The model microfounds rigorously on both the demand and the supply side. Firms and tourists operate under the hypothesis of limited rationality, the former in an oligopolistic context, the latter on the basis of mechanisms of evolutionary selection. Although not exhaustive, the model forms a theoretical platform that can be easily adapted to hypotheses and situations that differ from those originally hypothesized. As a consequence, this paper presents a series of numerical simulations. The results show the chaotic nature of a tourist flow, which limits the practicability of measures introduced to stabilise the system. In their place, measures are needed that stimulate a continuous reshaping of the system in relation to the factors that tend to change it.

Suggested Citation

  • Correani, Luca & Garofalo, Giuseppe, 2008. "Chaos in the tourism industry," MPRA Paper 9677, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:9677

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    References listed on IDEAS

    1. Brander, James A & Taylor, M Scott, 1998. "The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use," American Economic Review, American Economic Association, vol. 88(1), pages 119-138, March.
    2. Anderies, John M., 2000. "On modeling human behavior and institutions in simple ecological economic systems," Ecological Economics, Elsevier, vol. 35(3), pages 393-412, December.
    3. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, January.
    4. Guido Candela & Roberto Cellini, 2006. "Investment in Tourism Market: A Dynamic Model of Differentiated Oligopoly," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(1), pages 41-58, September.
    5. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
    6. Marie-Antoinette Maupertuis & Sauveur Giannoni, 2005. "Environmental Quality and Long Run Tourism Development a Cyclical Perspective for Small Island Tourist Economies," Working Papers 2005.145, Fondazione Eni Enrico Mattei.
    7. Currie, Martin & Kubin, Ingrid, 2006. "Chaos in the core-periphery model," Journal of Economic Behavior & Organization, Elsevier, vol. 60(2), pages 252-275, June.
    8. Hernandez, Juan M. & Leon, Carmelo J., 2007. "The interactions between natural and physical capitals in the tourist lifecycle model," Ecological Economics, Elsevier, vol. 62(1), pages 184-193, April.
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    More about this item


    sustainable tourism; chaos; evolutionary games; Butler's cycle;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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