If you, tourist, behave irrationally, I'll find you!

Sangwon Park, Juan L. Nicolau

Research output: Journal article publicationJournal articleAcademic researchpeer-review

2 Citations (Scopus)

Abstract

When departures from rational behavior can potentially be expected, modeling should allow for their identification and their quantification. In this regard, prices in tourism might have effects that may not be as apparent as economic theory predicts. This article incorporates the sticker shock formulation into the mixed logit model without imposing consistency with consumer theory to accommodate any possible positive or negative price effects. By allowing the parameters of “price” and “sticker shock term” to take any value – negative or positive – we detect abnormal behaviors in the tourist demand: not only is the negative relationship between price and demand inverted for some people but also some tourists might be willing to accept higher-than-expected prices. The “non-well-behaved” groups' shares are estimated.

Original languageEnglish
Pages (from-to)434-439
Number of pages6
JournalTourism Management
Volume69
DOIs
Publication statusPublished - Dec 2018

Keywords

  • Choice model
  • Irrational behavior
  • Reference prices
  • Sticker shock model
  • Utility theory

ASJC Scopus subject areas

  • Development
  • Transportation
  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

Cite this