IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwedp/201216.html
   My bibliography  Save this paper

Private and public incentive to reduce seasonality: A theoretical model

Author

Listed:
  • Cellini, Roberto
  • Rizzo, Giuseppe

Abstract

This paper presents a theoretical model to investigate the incentive of private producer and policymaker to reduce seasonality in a given market, where consumers derive different utilities from the consumption of the good in different seasons. The (seasonal) product differentiation is modelled along the lines of the contributions of Gabszewicz and Thisse (Price Competition, Quality and Income Disparities, 1979) and Shaked and Sutton (Relaxing Price Competition through Product Differentiation, 1982). The authors take into consideration that investments are possible to reduce the degree of seasonality. They show that, for a wide set of parameter configuration, the policy maker finds it optimal to make more effort to reduce seasonality as compared to private producers. The theoretical conclusion is consistent with empirical and anecdotical evidence, especially in the field of tourism markets.

Suggested Citation

  • Cellini, Roberto & Rizzo, Giuseppe, 2012. "Private and public incentive to reduce seasonality: A theoretical model," Economics Discussion Papers 2012-16, Kiel Institute for the World Economy (IfW Kiel).
  • Handle: RePEc:zbw:ifwedp:201216
    as

    Download full text from publisher

    File URL: http://www.economics-ejournal.org/economics/discussionpapers/2012-16
    Download Restriction: no

    File URL: https://www.econstor.eu/bitstream/10419/55853/1/688023037.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cuccia, Tiziana & Rizzo, Ilde, 2011. "Tourism seasonality in cultural destinations: Empirical evidence from Sicily," Tourism Management, Elsevier, vol. 32(3), pages 589-595.
    2. Raphael Raymond Bar-On, 1999. "The Measurement of Seasonality and its Economic Impacts," Tourism Economics, , vol. 5(4), pages 437-458, December.
    3. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    4. Ghysels,Eric & Osborn,Denise R., 2001. "The Econometric Analysis of Seasonal Time Series," Cambridge Books, Cambridge University Press, number 9780521565882.
    5. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    6. GABSZEWICZ, Jean, 2009. "A note on price competition in product differentiation models," LIDAM Discussion Papers CORE 2009058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Javier Capó Parrilla & Antoni Riera Font & Jaume Rosselló Nadal, 2006. "The Accommodation Determinants of Seasonal Patterns," CRE Working Papers (Documents de treball del CRE) 2006/01, Centre de Recerca Econòmica (UIB ·"Sa Nostra"), revised Feb 2006.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sara Dalir & Abror Mahamadaminov & Hossein GT Olya, 2021. "Airbnb and taxation: Developing a seasonal tax system," Tourism Economics, , vol. 27(2), pages 365-378, March.
    2. Connell, Joanne & Page, Stephen J. & Meyer, Denny, 2015. "Visitor attractions and events: Responding to seasonality," Tourism Management, Elsevier, vol. 46(C), pages 283-298.

    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. Cellini, Roberto & Rizzo, Giuseppe, 2010. "Private and public incentive to reduce seasonality: a simple theoretical model," MPRA Paper 23588, University Library of Munich, Germany.
    2. Fluet, Claude & Garella, Paolo G., 2002. "Advertising and prices as signals of quality in a regime of price rivalry," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 907-930, September.
    3. Ashantha Ranasinghe & Xuejuan Su, 2023. "When social assistance meets market power: A mixed duopoly view of health insurance in the United States," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 851-869, October.
    4. Pierre M. Picard & Alessandro Tampieri, 2016. "Income Effects and Vertical Differentiation in International Trade," DEM Discussion Paper Series 16-05, Department of Economics at the University of Luxembourg.
    5. Andr, Francisco J. & Gonzlez, Paula & Porteiro, Nicols, 2009. "Strategic quality competition and the Porter Hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 182-194, March.
    6. George Deltas & Thanasis Stengos & Eleftherios Zacharias, 2011. "Product line pricing in a vertically differentiated oligopoly," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 907-929, August.
    7. L. Lambertini & P. Tedeschi, 2003. "Sequential Entry in a Vertically Differentiated Duopoly," Working Papers 492, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Giannakas Konstantinos & Kalaitzandonakes Nicholas & Magnier Alexander & Mattas Konstadinos, 2011. "Economic Effects of Purity Standards in Biotech Labeling Laws," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-47, April.
    9. Bos, Iwan & Marini, Marco A., 2019. "Cartel stability under quality differentiation," Economics Letters, Elsevier, vol. 174(C), pages 70-73.
    10. Tiziana Cuccia, 2012. "Is it worth being inscribed in the world heritage list? A case study of �The Baroque cities in Val di Noto� (Sicily)," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 66(2), pages 169-190.
    11. Cristina Barbot, 2004. "Low cost carriers, secondary airports and State aid: an economic assessment of the Charleroi affair," FEP Working Papers 159, Universidade do Porto, Faculdade de Economia do Porto.
    12. Sanyal, Amal & Patibandla, Murali, 1999. "From Closed to Contestable Markets: Product Differentiation in Indian Durable Consumer Goods Industry," Working Papers 9-1999, Copenhagen Business School, Department of International Economics and Management.
    13. Esteve-Perez, Silviano, 2005. "Exit with vertical product differentiation," International Journal of Industrial Organization, Elsevier, vol. 23(3-4), pages 227-247, April.
    14. Justin P. Johnson & David P. Myatt, 2003. "Multiproduct Quality Competition: Fighting Brands and Product Line Pruning," American Economic Review, American Economic Association, vol. 93(3), pages 748-774, June.
    15. Corchón Luis Carlos & Zudenkova Galina, 2013. "The Welfare Effects of Location and Quality in Oligopoly," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 1143-1178, July.
    16. Cédric Argenton, 2010. "Exclusive Quality," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 690-716, September.
    17. Moresi, Serge & Schwartz, Marius, 2023. "Product innovation with vertical differentiation: Is a monopolist's incentive weaker?," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    18. Stole, Lars A., 2007. "Price Discrimination and Competition," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 34, pages 2221-2299, Elsevier.
    19. Naoto Jinji, 2003. "Strategic policy for product R&D with symmetric costs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(4), pages 993-1006, November.
    20. Langinier Corinne & Babcock Bruce A., 2008. "Agricultural Production Clubs: Viability and Welfare Implications," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-31, December.

    More about this item

    Keywords

    seasonality; tourism; public spending;
    All these keywords.

    JEL classification:

    • D29 - Microeconomics - - Production and Organizations - - - Other
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:ifwedp:201216. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.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.