A model of adverse selection in package tours

Chen, Yong (Ecole hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland) ; Mak, Barry (School of Hotel and Tourism Management, The Hong Kong Polytechnic University) ; Song, Haiyan (School of Hotel and Tourism Management, The Hong Kong Polytechnic University) ; Guo, Yingzhi (Department of Tourism,Fudan University)

The package tour market is information-intensive in nature. Its complex information structure is generally inaccessible to tourists, whose purchase behavior may be affected by the extent to which they can access such information. This study shows that package tours can be structured by both tour operators’ bundling strategy and tourist preference, resu lting in different qualities of package tours. A model of adverse selection is developed to explain tourists’ exclusive choice of low-quality package t ours, as they have little information about tour operators’ bundling strategy. It concludes that tourists who possess less information of tour operators’ bundling strategy are more likely to purchase low-quality package tours, resulting in adverse selection of package tours.


Keywords:
Conference Type:
full paper
Faculty:
Economie et Services
School:
EHL
Subject(s):
Economie/gestion
Publisher:
Orlando, USA, 29-31 July 2015
Date:
Orlando, USA
29-31 July 2015
2015
Pagination:
12 p.
Published in:
Proceedings of the I-CHRIE conference 2015
Appears in Collection:

Note: The status of this file is: restricted


 Record created 2015-10-23, last modified 2019-06-11

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