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| Pricing and Service Decisions of Tourism O2O Model with Fairness Concerns |
| TAN Chunqiao，CHEN Liping，CUI Chunsheng |
| 1. Central South University, Changsha, China; 2. Beijing Wuzi University, Beijing, China |
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Abstract This study focuses on a dual-channel supply chain consisting of an online seller and an offline travel agency. It considers the channel members’ fair concern behaviors, and establishes the Stackelberg model with online sellers as the leader to study the optimal strategy of pricing and service level of tourism products. Models are constructed under three different situations, i.e., centralized, decentralized with no fair concern and decentralized with fair concern. The impact of the two parties’ fairness concern on the optimal strategy and benefits is studied. This study also analyses the impact of online channel loyalty on pricing, service level, and channel member profit. The results show that when the members of the tourism O2O model exhibit the characteristics of fair concern behavior, the two parties will adjust their strategies to obtain higher returns; as the level of fairness of online sellers increases, the travel society will lower the service level, and the travel agencies choose to provide low-cost “cheap tour” to the market when certain conditions are met; however, fair concerns of offline travel agencies will not change the price and service levels of travel products. Regardless of the degree of fairness of the other party, maximizing fairness is the best strategy for both parties, but the fair concern ultimately leads to the prisoner’s dilemma.
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Received: 10 December 2018
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