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Analyzing Price Discrimination in Tourism Through Tripartite Evolutionary Game Theory: A Focus on Value Co-Creation

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  • Xingwang Zhang
  • Jie Xin

Abstract

In the context of big data, pricing discrimination in global tourism expands the potential for reputational harm due to readily available information influencing tourists’ decision-making processes. This phenomenon also impacts the selection tactics of market entities, raising concerns about shared market value loss. By applying the value co-creation theory, wherein consumers and businesses collaborate to generate value, understanding the dynamics between businesses and tourists, as well as the motivations behind price discrimination, becomes more accessible. Furthermore, this study explores price discrimination behavior in the tourism market through the lens of value co-creation, employing a combination of prospect theory and mental accounting theory (PT-MA). Through the development of an evolutionary game model encompassing tourists, tourism enterprises, and the government, strategic decisions made by these stakeholders are analyzed. Besides, simulation and the in-depth examination of the model’s evolution using Matlab software reveal several key findings: (1) tourists tend to opt for compromise strategies due to their aversion to transactional costs associated with complaints; (2) reputational loss and sensitivity to loss aversion are inversely related to the likelihood of enterprises engaging in price discrimination; and (3) proactive and effective regulatory measures by the government prove successful in curtailing price discrimination in the tourism market, whereas fine policies demonstrate less efficacy. This study contributes to establishing a theoretical framework for selecting strategies aimed at achieving value co-creation in tourism.

Suggested Citation

  • Xingwang Zhang & Jie Xin, 2024. "Analyzing Price Discrimination in Tourism Through Tripartite Evolutionary Game Theory: A Focus on Value Co-Creation," SAGE Open, , vol. 14(3), pages 21582440241, September.
    • Handle: RePEc:sae:sagope:v:14:y:2024:i:3:p:21582440241286286
    DOI: 10.1177/21582440241286286
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