Cellini, Roberto and Rizzo, Giuseppe (2010): Private and public incentive to reduce seasonality: a simple theoretical model.
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This paper presents a theoretical model to investigate the incentive of private producer and policy-maker to reduce seasonality in a given market, where consumers derive different utilities from the consumption of the good in different seasons. The (seasonal) product differentiation is modeled along the lines of the contributions of Gabszewicz and Thisse (1979) and Shaked and Sutton (1982). We take into consideration that investments are possible to reduce the degree of seasonality. We show that, for a wide set of parameter configuration, the policy maker finds it optimal to make more effort to reduce seasonality as compared to private producers. The theoretical conclusion is consistent with empirical and anecdotical evidence, especially in the field of tourism markets.
|Item Type:||MPRA Paper|
|Original Title:||Private and public incentive to reduce seasonality: a simple theoretical model|
|Keywords:||Seasonality; Tourism; Public Spending|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D29 - Other
L - Industrial Organization > L8 - Industry Studies: Services > L83 - Sports ; Gambling ; Restaurants ; Recreation ; Tourism
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly ; Monopolization Strategies
|Depositing User:||Roberto Cellini|
|Date Deposited:||15. Jul 2010 15:29|
|Last Modified:||25. Sep 2015 05:28|
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Private and public incentive to reduce seasonality: a simple theoretical model. (deposited 01. Jul 2010 00:41)
- Private and public incentive to reduce seasonality: a simple theoretical model. (deposited 15. Jul 2010 15:29) [Currently Displayed]