IDEAS home Printed from https://ideas.repec.org/p/tsa/wpaper/0141mss.html
   My bibliography  Save this paper

Optimal Transport Provision To A Tourist Destination: A Mechanism Design Approach

Author

Listed:
  • Amitrajeet A. Batabyal

    (Department of Economics, Rochester Institute of Technology)

  • Hamid Beladi

    (UTSA)

Abstract

How to provide transport infrastructure to a tourist destination optimally is a salient question in tourism economics. Even so, this question has received no theoretical attention in the literature. Hence, we use contract theory to provide the first theoretical analysis of the optimal provision of transport infrastructure by an asymmetrically informed tourist agency (TA) interested in promoting a particular destination to tourists. Specifically, we first delineate our model and then solve for the first-best contract describing the interaction between the TA and a transport infrastructure providing firm. Second, we study the optimal second-best contract with asymmetric information when the above firm can be of two possible types. Finally, we conclude and then discuss extensions of the research described in this paper.

Suggested Citation

  • Amitrajeet A. Batabyal & Hamid Beladi, 2015. "Optimal Transport Provision To A Tourist Destination: A Mechanism Design Approach," Working Papers 0141mss, College of Business, University of Texas at San Antonio.
    • Handle: RePEc:tsa:wpaper:0141mss
    as

    Download full text from publisher

    File URL: http://interim.business.utsa.edu/wps/mss/0001MSS-253-2016.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, December.
    2. Leiva, Ricardo & Roy, Anuradha, 2012. "Linear discrimination for three-level multivariate data with a separable additive mean vector and a doubly exchangeable covariance structure," Computational Statistics & Data Analysis, Elsevier, vol. 56(6), pages 1644-1661.
    3. Anuradha Roy & Ricardo Leiva, 2013. "Testing the Equality of Mean Vectors for Paired Doubly Multivariate Observations," Working Papers 0180mss, College of Business, University of Texas at San Antonio.
    4. Leiva, Ricardo, 2007. "Linear discrimination with equicorrelated training vectors," Journal of Multivariate Analysis, Elsevier, vol. 98(2), pages 384-409, February.
    5. Boopen Seetanah & Jameel Khadaroo, 2009. "An Analysis of the Relationship between Transport Capital and Tourism Development in a Dynamic Framework," Tourism Economics, , vol. 15(4), pages 785-802, December.
    6. Golam Rasul & Prem Manandhar, 2009. "Prospects and Problems in Promoting Tourism in South Asia," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(1), pages 187-207, January.
    7. Srivastava, Muni S., 2006. "Minimum distance classification rules for high dimensional data," Journal of Multivariate Analysis, Elsevier, vol. 97(9), pages 2057-2070, October.
    8. Ritter, Gunter & Gallegos, María Teresa, 2002. "Bayesian Object Identification: Variants," Journal of Multivariate Analysis, Elsevier, vol. 81(2), pages 301-334, May.
    9. Kubokawa, Tatsuya & Hyodo, Masashi & Srivastava, Muni S., 2013. "Asymptotic expansion and estimation of EPMC for linear classification rules in high dimension," Journal of Multivariate Analysis, Elsevier, vol. 115(C), pages 496-515.
    10. Carlos A. Coelho & Anuradha Roy, 2013. "Testing of hypothesis of a block compound symmetric covariance matrix," Working Papers 0179mss, College of Business, University of Texas at San Antonio.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Batabyal, Amitrajeet A. & Beladi, Hamid, 2015. "Optimal transport provision to a tourist destination: A contract theory perspective," Economic Modelling, Elsevier, vol. 47(C), pages 180-184.
    2. Ricardo Leiva & Anuradha Roy, 2016. "Multi-level multivariate normal distribution with self-similar compound symmetry covariance matrix," Working Papers 0146mss, College of Business, University of Texas at San Antonio.
    3. Roy, Anuradha & Leiva, Ricardo & Žežula, Ivan & Klein, Daniel, 2015. "Testing the equality of mean vectors for paired doubly multivariate observations in blocked compound symmetric covariance matrix setup," Journal of Multivariate Analysis, Elsevier, vol. 137(C), pages 50-60.
    4. Kihoon Yoon & Daijin Ko & Carolina B. Livi & Nathan Trinklein & Mark Doderer & Stephen Kwek & Luiz O. F. Penalva, 2008. "Over-represented sequences located on UTRs are potentially involved in regulatory functions," Working Papers 0053, College of Business, University of Texas at San Antonio.
    5. Tatjana Pavlenko & Anuradha Roy, 2013. "Supervised classifiers of ultra high-dimensional higher-order data with locally doubly exchangeable covariance structure," Working Papers 0185mss, College of Business, University of Texas at San Antonio.
    6. Carlos A. Coelho & Anuradha Roy, 2014. "Testing the hypothesis of a doubly exchangeable covariance matrix for elliptically contoured distributions," Working Papers 0145mss, College of Business, University of Texas at San Antonio.
    7. Anuradha Roy & Ricardo Leiva, 2008. "An Extension of the Traditional Classi cation Rules: the Case of Non-Random Samples," Working Papers 0057, College of Business, University of Texas at San Antonio.
    8. Anuradha Roy & Ricardo Leiva, 2008. "Testing of a Structures Covariance Matrix for Three-Level Repeated Measures Data," Working Papers 0037, College of Business, University of Texas at San Antonio.
    9. Pamela C. Smith & Dana A. Forgione, 2008. "Global Outsourcing of Healthcare: A Medical Tourism Decision Model," Working Papers 0033, College of Business, University of Texas at San Antonio.
    10. Giat, Yahel & Subramanian, Ajay, 2013. "Dynamic contracting under imperfect public information and asymmetric beliefs," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2833-2861.
    11. H Peyton Young, 2014. "The Evolution of Social Norms," Economics Series Working Papers 726, University of Oxford, Department of Economics.
    12. Schottmuller, C. & Boone, J., 2012. "Stochastic Mechanisms and Quasi-Linear Preferences," Discussion Paper 2012-047, Tilburg University, Center for Economic Research.
    13. Gordon L Clark & Ashby H B Monk, 2014. "The Geography of Investment Management Contracts: The UK, Europe, and the Global Financial Services Industry," Environment and Planning A, , vol. 46(3), pages 531-549, March.
    14. Nieken, Petra & Schmitz, Patrick W., 2012. "Repeated moral hazard and contracts with memory: A laboratory experiment," Games and Economic Behavior, Elsevier, vol. 75(2), pages 1000-1008.
    15. Birgitte Grøgaard & Asmund Rygh & Gabriel R. G. Benito, 2019. "Bringing corporate governance into internalization theory: State ownership and foreign entry strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1310-1337, October.
    16. Beccuti, Juan & Möller, Marc, 2021. "Screening by mode of trade," Games and Economic Behavior, Elsevier, vol. 129(C), pages 400-420.
    17. Alvaro Forteza & Cecilia Noboa, 2014. "Discretion Rather than Simple Rules: the Case of Social Protection," Documentos de Trabajo (working papers) 0814, Department of Economics - dECON.
    18. Lutz G. Arnold & Andreas Babl, 2013. "Alas, My Home is My Castle: The Excessive Screening Cost of Buying a House," Working Papers 134, Bavarian Graduate Program in Economics (BGPE).
    19. Inés Macho-Stadler & David Pérez-Castrillo, 2018. "Moral hazard: Base models and two extensions," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume I, chapter 16, pages 453-485, Edward Elgar Publishing.
    20. Pierpaolo Battigalli, 2006. "Rationalization In Signaling Games: Theory And Applications," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 67-93.

    More about this item

    Keywords

    Asymmetric Information; Contract; Destination; Tourist; Transport Infrastructure;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tsa:wpaper:0141mss. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wendy Frost (email available below). General contact details of provider: https://edirc.repec.org/data/cbutsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.