69211 - Tourism Microeconomics

Course Unit Page

  • Teacher Maurizio Mussoni

  • Learning modules Maurizio Mussoni (Modulo 1)
    Lorenzo Masiero (Modulo 2)

  • Credits 12

  • SSD SECS-P/01

  • Teaching Mode Traditional lectures Traditional lectures (Modulo 1)
    Traditional lectures (Modulo 2)

  • Language English

  • Campus of Rimini

  • Degree Programme Second cycle degree programme (LM) in Tourism Economics and Management (cod. 5910)

  • Course Timetable from Feb 13, 2023 to Mar 14, 2023

Academic Year 2022/2023

Learning outcomes

Learning Outcomes: At the end of the course the student knows some advanced models of microeconomic theory and their application to tourism. Moreover, the student knows how to interpret the tourist's behaviour, the characteristics of tourism demand and supply. More specifically, the student is able to: critically evaluate recent studies of microeconomics, with particular reference to the economic problems of tourism firms and destinations, their product and pricing strategies and the organization of tourism markets; to compare theoretical results with empirical evidence; to develop autonomous ability in undertaking empirical research in tourism microeconomics.

Course contents

MODULE I: Analysis of Tourism Demand (Maurizio Mussoni - 30 hours)

1. Short review of microeconomics and tourism economics

  • Review of microeconomic theory: neoclassical (or Walrasian) general equilibrium theory; Pareto efficiency and the two fundamental theorems of welfare economics; market failures, asymmetric information, and uncertainty.
  • The tourism demand and the tourism markets: characteristics of the tourism good; timing in consuming a tourism good; the role of information in tourists' choices (incomplete and imperfect information); market failures and asymmetric information in tourism markets; search and experience goods in the tourism market.

2. Economic theory of contracts

  • Economic theory of contracts (implicit and explicit contracts, complete and incomplete contracts).
  • Contracts enforcement and enforcement mechanisms.
  • The Coase theorem.
  • Social efficient outcome, first-best and second-best contracts.
  • The contracts in tourism markets.

3. Economic uncertainty and tourism. Insurance contracts in tourism

  • Consumer decisions under uncertainty.
  • Expected utility theory and attitudes towards risk.
  • Insurance and risk-sharing contracts.
  • Insurance contracts in tourism: insurance against the "economic risk" of ruined holidays.

4. Future contracts in tourism

  • "Free Sale" and "Allotment" Contracts.

5. Asymmetric information and uncertainty. Incentive contracts. Signaling, reputation, and selection contract

  • Incomplete, imperfect, and asymmetric information.
  • The moral hazard problem (hidden action): incentive contracts and the trade-off between incentives and insurance. Incentive contracts in tourism.
  • The adverse selection problem (hidden information): signaling and selection mechanisms in tourism.
  • Implicit contracts and reputation mechanisms in tourism.

 

MODULE II: Industrial Organization and Market Structure in Tourism (Lorenzo Masiero - 30 hours)

1. Monopoly

2. Competition

3. Pricing

4. Consumer theory

5. Policy

Readings/Bibliography

MODULE I: Analysis of Tourism Demand (Maurizio Mussoni - 30 hours)

  • R. Cooter, R. Ulen. Law and Economics, 6th Edition, 2016, Berkeley Law Books (chapters 2 and 8).
  • G. Candela, P. Figini. The Economics of Tourism Destinations, Springer, 2012 (chapters 10 and 11).
  • M. Castellani, M. Mussoni. An Economic Analysis of Tourism Contracts: Allotment and Free Sale, in "Advances in Modern Tourism Research", Springer-Verlag, Berlin, 2007, p. 51-85 (available on the faculty member's website).

 

MODULE II: Industrial Organization and Market Structure in Tourism (Lorenzo Masiero - 30 hours)

  • Candela, G. and Figini, P. The Economics of Tourism Destinations, Springer, 2012 (chapters 5-10).

Other specific references to tourism applications will be given in class.

The teaching material (slides and case studies) can be downloaded by clicking on "Teaching resources on Virtuale" or directly from the "Virtuale" website (https://virtuale.unibo.it).

Any additional material will be communicated at the beginning of the course, and made available online within the course's teaching material.

Teaching methods

60 hours of in-class lectures and discussion of case studies.

Assessment methods

The exam is composed of two written exams which cover each Module I and Module II of the course and aim to evaluate the skills and the critical abilities developed by the students regarding the microeconomic theories explained during lectures and their applications to tourism. Each written exam on one Module lasts 1 hour.

The written exams consist of “open-answer questions”, and students must select two questions out of the four proposed and answer to all the corresponding sub-points. The answer to each question is worth 30 points, and the final mark is computed as the simple average of the two marks obtained for each question. An example of an exam will be illustrated during the course.

The exam is currently carried out only in person (face to face). The option to carry out the exam online will be available if and only if the University guarantees this option.

For students attending lectures, it is possible to do the written exams through two mid-term assessments (partial exams):

  • the mid-term assessment for Module I (1/2 of the final mark) is scheduled at the end of the first term of lectures and is a 1-hour exam;
  • the mid-term assessment for Module II (1/2 of the final mark) is scheduled at the end of the second term of lectures and is a 1-hour exam.

Only students who pass the first mid-term assessment are admitted to the second mid-term assessment. To pass the exam, students must obtain a sufficient grade (18/30) for both Module I and Module II.

The final mark is computed as the simple average of the two marks obtained for Module I and Module II, and it is expressed out of 30 points according to the following graduation:

  • <18, fail;
  • 18-23, sufficient;
  • 24-27, good;
  • 28-30, very good;
  • 30 with laude, excellent.

The use of supporting material such as textbooks, personal notes or electronic devices is not allowed during the exam. Registration for the exam is compulsory, and students have to register through AlmaEsami website (https://almaesami.unibo.it) according to the general rules of the School of Economics and Management.

Teaching tools

Teaching material (slides and discussion of case studies).

The slides can be downloaded by clicking on "Teaching resources on Virtuale" or directly from the "Virtuale" website (https://virtuale.unibo.it).

Office hours

See the website of Maurizio Mussoni

See the website of Lorenzo Masiero