COOPERATION CONTRACT IN TOURISM SUPPLY CHAINS: THE OPTIMAL PRICING STRATEGY OF HOTELS FOR COOPERATIVE THIRD PARTY STRATEGIC WEBSITES

Abstract

This paper aims to find the optimal pricing strategy for tourism hotels when they operate their online distribution channel by cooperating with a third party website. The paper first gives the first-best solution when all the participants are integrated as a single system, and then leads to the second-best one under the decentralized scenario through a non-cooperative game model composed by a Stackelberg game between the hotels and the website and a Nash game among the hotels. Through a numerical example, we analyze the decision making process of the players; and give the service providers some useful suggestions for operating their cooperative relationship successfully.