Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

 
2007 Annual International CHRIE Conference & Exposition 
506
In this research, Game Theory is chosen for examining competition dynamics of tourism supply chain for 
package holidays for several reasons. First, Game Theory is a powerful tool for analyzing situation in which the 
decisions of multiple agents affect each agent’s payoff (Cachon and Netessine, 2003). Second, equilibriums of game 
give guidelines for tourism managers who could reasonably accurately predict the play of their opponents and 
identify the optimal responsive strategies. Third, Game Theory has been successfully applied in production supply 
chain situation (Carr and Karmarkar 2005; Netessine and Shumsky 2005), as well as in tourism and hospitality 
industry (Wie 2003; Bastakis, Buhalis and Butler 2004; Garcia and Tugores 2006). 
The rest of the paper is organized as follows. After a review of the literature in section 2, in section 3 we 
formulate the three types of competition as a game model and illustrate the equilibrium solution. Section 4 provides 
theoretical results of competition dynamics. Several management implications are presented in section 5. General 
conclusions and directions for future work are presented in Section 6. All proofs of results are given in Appendix.