A Study of Economic Analysis and Business Strategy in the Recreational Industry: Theoretical Models

• Main Authors: Huang-Ju Chen, 陳煌儒
• Other Authors: Yao-Hsien Lee
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/92161687127680160423

博士 === 中華大學 === 科技管理學系(所) === 94 === This study uses a game theory approach to investigate three subjects. Chapter 2 investigates those cases where firms use both comparison advertising to affect the preference of consumers and price competition to acquire greater profits, and then we analyze the effects of firms’ noncooperative and cooperative comparison advertising strategies on those firms’ comparison advertising, product prices and profits, consumer surplus and social welfare. We find that only with specific loyalty segmentation, can firms increase their market share and profits by using comparison advertising. However, this implies that with specific loyalty segmentation, firms engaging in comparison advertising to intensify product differentiation in an effort to increase their market share actually tend to loose the intensity of price competition. Finally, we find that the effects of changing consumers’ loyalty segmentation on social welfare depend on which interval those consumers belong to. When consumers have a relatively high degree of loyalty, firms employing cooperative comparison advertising can actually increase social welfare. Chapter 3 examines how a firm decides its recreational service prices to achieve the profit maximization under taking account of the tourist’s recreational consumption styles, network effect, and displeasing cost. We demonstrate the tourist’s displeasing cost resulted from dissatisfied recreational service has different impacts upon the firm’s pricing decisions according to different network effects. Therefore, if the firm knows the attributes of the tourist’s consumption styles and exploits the attributes to determine the recreational service prices, then it can obtain higher profits by discriminating the prices. Our result shows that the free recreational service provided by the firm in fact is a demarketing strategy. This strategy allows the firm to deter the demand quantity of the specific tourist style and to increase the demand of another tourist style, by doing so, it can segment the tourist’s styles to obtain higher profits. Chapter 4 analyzes the effects of tourist life-style, the specificity of leisure activity and leisure time on the tourist’s tourism welfare and leisure activities provided by firms. We find that under the case of two firms or only one firm providing leisure activities, changes in the tourist’s life-style, the specificity of leisure activity and tourist’s leisure time have different impacts upon the chosen leisure activities of tourists, the market share of the firm, total available leisure activities of the tourist and the tourist’s tourism welfare.