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

RESEARCH METHOD 
The system we considered is composed of two competitive TSCs. Each includes multiple tour operators (TOs), 
multiple hotel & accommodation providers (HAs), and one theme park operator (TP). TOs and HAs in the same 
TSC are grouped into sectors, and all entities within a sector are identical. The TSC is represented as a network 
where each sector is represented as a node (see figure 1). The three sectors are arranged into two layers or echelons. 
TP and HAs in the upstream layer are suppliers of tourist components or options of package holiday products. TO in 
the downstream layer are responsible for configuring and marketing package holidays according to tourist 
requirements from component options provided by the upstream sectors. The price charged by tour operators 
includes the payment to the TP and the HA. These two substitutive TSCs provide package holidays with different 
TPs. Tourists only choose one of the two types of package holiday. For the sake of simplicity, we assume that all the 
tourists join the package holidays, which means that TP do not sell ticket directly to tourists, or too little tourists 
buying ticket themselves to omit. 
There are three types of competition exist (denoted by different symbols in figure 1) in the game. One is the 
inter-sector competition between suppliers within a sector. It is illustrated by quantity competition in TO sector and 
HA sector. The second is the sector competition between sectors in certain supply chain. Specially, vertical sector 
competition is between sectors in different layer, such as TP sector and TO sector, as well as HA sector and TO 
sector. Horizontal sector competition is between sectors in the same layer, such as TP sector and HA sector. The 

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