78361 - Competition in Tourism Markets

Learning outcomes

The purpose of this course is to introduce students to economic tools for understanding competition in tourist markets, both from a theoretical and an empirical point of view. At the of the course, students will be able to i) make sense of tourist firms' choices concerning pricing, product characteristics, innovation and advertising, with a particular attention to the international dimension of competition; ii) evaluate the social consequences of these choices, and judge public policies aimed at improving the market outcomes.

Course contents

First module (Prof. Elias Carroni)

• Static imperfect competition (price and quantity competition; strategic substitutes and complements)
• Dynamic aspects of imperfect competition (sequential choices and Stackelberg competition; free entry; industry concentration and firm turnover)
• Product differentiation and advertising (horizontal vs. vertical differentiation; persuasive vs. informative advertising; effects of advertising on competition)
• Consumer inertia (switching costs, customer poaching)

Material:

(1) Slides

(2) Book Chapters:

• Market power [Part II - Chapters 3-4]
• Sources of market power [Part III - Chapters 5-6-7]
  

Second Module (Prof. Stefano Bolatto)

• Pricing strategies and market segmentation (group vs. personalized pricing, menu pricing, intertemporal price discrimination with and without commitment on future prices, pure and mixed bundling)
• Collusion and competition policy (cartel formation and tacit collusion, sustainability of tacit collusion, antitrust policy; taxonomy of entry-related strategies, strategies affecting cost variables , strategies affecting demand variables)
• Market intermediation (dealers, match-makers and two-sided platforms)

Materials:

(1) Slides

(2) Book Chapters:

• Pricing strategies and market segmentation [Part IV]
  
• Market intermediation [Chapter 22 in Part IX]
• Cartels and tacit collusion [Chapter 14 in Part VI]

Readings/Bibliography

Slides and other teaching materials made available on virtuale.unibo.it

Textbook: Belleflamme, Paul, and Martin Peitz, “Industrial organization: markets and strategies”, Cambridge University Press, 2015.

Teaching methods

Lectures, teamworks, math lab with Maple

Assessment methods

Two written midterms or, alternatively, one final written exam over the entire program.

For attending students (those enrolled in the third academic year), midterm exams will consist of both multiple choice and one open-ended question. Each midterm is worth a max of 10/30 of the final grade for the subject.

The remaining 10 points can be achieved to the participation either to a teamwork or to the mathematical lab with Maple. Students are free to choose between the two options.

Teamwork is in form of a short essay on selected topics (a literature review based on academic articles on tourism economics, published in peer-reviewed journals).

For non-attending students, midterm exams will consist of both multiple choice and two open-ended questions. Each midterm is worth a max of 15/30 of the final grade for the subject.

The grade is graduated as follows:

<18 failed
18-23 sufficient
24-27 good
28-30 very good
30 e lode excellent

Teaching tools

Materials will be uploaded on the course page on the Moodle platform (www.virtuale.unibo.it )

Office hours: by appointment for both Prof. Elias Carroni (fist module) and Prof. Stefano Bolatto (second module)

Office hours

See the website of Elias Carroni

See the website of Stefano Antonio Bolatto