Track: Operations Research
Abstract
Pricing plays an important role in any market competition, but particularly in those businesses that hold a seat in hyper competitive economic activities such as hotels. This paper analyses a market competition between one corporate social responsibility (CSR) hotel and one for profit (FP) hotel, in which both hotels set room prices. We study three different market behaviors: (i) both hotels take their decisions simultaneously; (ii) the CSR hotel takes the leader position; (iii) the FP hotel takes the leader position. For each situation, by using game theory techniques, we compute the different outcomes of the model at equilibrium. We also describe the effects of CSR on the outcomes.