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

 
2007 Annual International CHRIE Conference & Exposition 
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third is the chain competition between two TSCs. It is presented by substitute package tours directly competing in 
the terminal market. TOs play the key role in this competition as they directly face customers. 
A game in normal form consists of (1) players, (2) strategies available to each player, and (3) payoffs received 
by each player (Cachon and Netessine 2003). In our model, all the entities (TP, TOs, and HAs) in TSCs are game 
players, and profits are their payoffs. For TO and HA, quantities are their strategies, while TP takes price as strategy. 
Competition takes in the market as described in the following multi-stage game. At the first, TP decides the ticket 
price, HA sector gives market clear serve prices through quantity competition between HAs at the same time. At the 
second, each TO learns the price decision made by TP and HA and decide number of tourists they plan to serve, then 
market determines final price of package holiday.