IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v22y2016i4p837-846.html
   My bibliography  Save this article

‘Should I stay or should I go?’

Author

Listed:
  • Lorenzo Zirulia

    (University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy; ICRIOS-Bocconi University, Italy)

Abstract

The aim of this article is to model the decisions of tourists and a monopolist firm when weather forecasts are available. Before deciding whether to go on holiday or not, but after the firm has decided and posted its price, tourists can look at weather forecasts. Our results show that the price chosen by the firm and the corresponding equilibrium profit are decreasing as a function of the accuracy of weather forecasts. Consumers, instead, are better off, the more accurate weather forecasts become. Managerial and policy implications are also derived.

Suggested Citation

  • Lorenzo Zirulia, 2016. "‘Should I stay or should I go?’," Tourism Economics, , vol. 22(4), pages 837-846, August.
    • Handle: RePEc:sae:toueco:v:22:y:2016:i:4:p:837-846
    DOI: 10.1177/1354816616654256
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1354816616654256
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1354816616654256?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bruce A. Babcock, 1990. "The Value of Weather Information in Market Equilibrium," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 63-72.
    2. Richard R. Nelson & Sidney G. Winter, 1964. "A Case Study in the Economics of Information and Coordination the Weather Forecasting System," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(3), pages 420-441.
    3. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    4. Richard M. Adams & Stephen Polasky, 1998. "The Value of El Niño Forecasts in the Management of Salmon: A Stochastic Dynamic Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 765-777.
    5. Emilio Cerdá Tena & Sonia Quiroga Gómez, 2011. "Economic value of weather forecasting: the role of risk aversion," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(1), pages 130-149, July.
    6. Bank, Matthias & Wiesner, Robert, 2011. "Determinants of weather derivatives usage in the Austrian winter tourism industry," Tourism Management, Elsevier, vol. 32(1), pages 62-68.
    7. Guido Candela & Roberto Cellini, 1998. "I mercati dei beni di qualità esogena," Politica economica, Società editrice il Mulino, issue 2, pages 217-244.
    8. Craft, Erik D, 1998. "The Value of Weather Information Services for Nineteenth-Century Great Lakes Shipping," American Economic Review, American Economic Association, vol. 88(5), pages 1059-1076, December.
    9. Anbarci, Nejat & Boyd III, John & Floehr, Eric & Lee, Jungmin & Song, Joon Jin, 2011. "Population and income sensitivity of private and public weather forecasting," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 124-133, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. L. Zirulia, 2015. "Should I stay or should I go? : Weather forecasts and the economics of short breaks," Working Papers wp1034, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Paolo Figini & Simona Cicognani & Lorenzo Zirulia, 2023. "Booking in the Rain. Testing the Impact of Public Information on Prices," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(3), pages 1329-1364, November.
    3. Macauley, Molly, 2005. "The Value of Information: A Background Paper on Measuring the Contribution of Space-Derived Earth Science Data to National Resource Management," RFF Working Paper Series dp-05-26, Resources for the Future.
    4. Anbarci, Nejat & Boyd III, John & Floehr, Eric & Lee, Jungmin & Song, Joon Jin, 2011. "Population and income sensitivity of private and public weather forecasting," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 124-133, March.
    5. Oscar Gutiérrez & Francisco Ruiz-Aliseda, 2011. "Real options with unknown-date events," Annals of Finance, Springer, vol. 7(2), pages 171-198, May.
    6. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    7. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    8. Simon P. Anderson & Régis Renault, 2011. "Price Discrimination," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 22, Edward Elgar Publishing.
    9. Leonard J. Mirman & Egas M. Salgueiro & Marc Santugini, 2013. "Integrating Real and Financial Decisions of the Firm," Cahiers de recherche 1333, CIRPEE.
    10. McCarthy, Ian M., 2016. "Advertising intensity and welfare in an equilibrium search model," Economics Letters, Elsevier, vol. 141(C), pages 20-26.
    11. Kuosmanen, Natalia & Valmari, Nelli, 2023. "Renewal of Companies Through Product Switching," ETLA Working Papers 104, The Research Institute of the Finnish Economy.
    12. Alexander, Corinne E., 2002. "The Role Of Seed Company Supplied Information In Farmers' Decisions," 2002 Annual meeting, July 28-31, Long Beach, CA 19617, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Kathryn E. Spier, 2003. "“Tied to the Mast”: Most-Favored-Nation Clauses in Settlement Contracts," The Journal of Legal Studies, University of Chicago Press, vol. 32(1), pages 91-120, January.
    14. Pierre-Pascal Gendron, 1996. "Corporation Tax Asymmetries: An Oligopolistic Supergame Analysis," Working Papers ecpap-96-04, University of Toronto, Department of Economics.
    15. Musso, Enrico & Ferrari, Claudio & Benacchio, Marco, 2006. "Port Investment: Profitability, Economic Impact and Financing," Research in Transportation Economics, Elsevier, vol. 16(1), pages 171-218, January.
    16. Thomas Grandner, 2006. "A Note on Franchising and Wage Bargaining," Journal of Economics, Springer, vol. 87(3), pages 281-293, April.
    17. MartI´nez-Sánchez, Francisco, 2010. "Avoiding commercial piracy," Information Economics and Policy, Elsevier, vol. 22(4), pages 398-408, December.
    18. repec:zbw:bofrdp:2004_010 is not listed on IDEAS
    19. Qu, Zhan & Raff, Horst & Schmitt, Nicolas, 2018. "Incentives through inventory control in supply chains," International Journal of Industrial Organization, Elsevier, vol. 59(C), pages 486-513.
    20. Vincent Mak & Amnon Rapoport & Eyran J. Gisches & Jiaojie Han, 2014. "Purchasing Scarce Products Under Dynamic Pricing: An Experimental Investigation," Manufacturing & Service Operations Management, INFORMS, vol. 16(3), pages 425-438, July.
    21. Lau, Sau-Him Paul, 2001. "Aggregate Pattern of Time-dependent Adjustment Rules, II: Strategic Complementarity and Endogenous Nonsynchronization," Journal of Economic Theory, Elsevier, vol. 98(2), pages 199-231, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:22:y:2016:i:4:p:837-846. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.