h i g h l i g h t sBridges economics and marketing by exploring (non)price competition in a game theoretic conjoint analysis approach. Develops a framework where hotels with different attributes sustain different prices but still are in equilibrium. Uses conjoint analysis to measure the relative weights of attributes, and to handle the inclusion of a none-option.
a b s t r a c tThis paper explores a game-theoretically founded approach to conjoint analysis that determines equilibrium room rates under differentiated price competition in an oligopolistic hotel market. Competition between hotels is specified in terms of market share functions that can be estimated using multinomial logit models of consumer choice. The approach is based on choice-based conjoint analysis that permits the estimation of attributes weights ("part-worths") for an additive utility formulation of the utility function. From this, room rates that equilibrate the market, conditioned on the differences in services and facilities offered by competing hotels, can be determined. The approach is illustrated by an example.
This paper analyzes the process of changing a competition-oriented room rate pricing approach into a company-wide value-based pricing process from the perspective of the resource-based view. From a sample of 33 hotels in 16 countries it evaluates data from 55 open-ended interviews, documentation and archival records. Employing systems methodology the study illustrates that pricing is an intra/inter-organizational activity involving cross-disciplinary processes at various hierarchical levels. It finds that changing to value-based pricing involves a remarkable level of especially intangible resources. The study identifies these resources and their impact, identifying how constraints and tensions influence the shift in pricing orientation. It suggests that pricing in a value-driven policy comprises a capability. Without this capability interpersonal realities and goal conflicts, most prominently between sales and revenue, are found to impose major effects on the alignment of functional levels, the change in pricing processes, and the degree to which these are really value-driven
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