Keynesian Policies for Tourism: Taxation without Coordination

Guido Candela, Massimiliano Castellani and Maurizio Mussoni
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Guido Candela: Department of Economics, University of Bologna, Piazza Scaravilli 1, 401216 Bologna, Italy
Massimiliano Castellani: Department of Economics, University of Bologna, Via Angherà 22, 47921 Rimini, Italy, and The Rimini Centre for Economic Analysis (RCEA), Italy

Tourism Economics, 2015, vol. 21, issue 3, 527-541

Abstract: In this paper the authors investigate the effect of a Keynesian policy in tourism destinations where tourism products are mainly sold through ‘direct sales' (decentralized solution) and the tourism market equilibrium is characterized by sticky prices and unemployment (coordination failure); thus the conditions for a Keynesian demand policy are verified. This policy is a Pareto improving solution with respect to the organization of sales by tour operators or destination managers (centralized solution), since tourism firms are not worse-off in terms of profits and there is an increase of tourism production as well as of employment.

Keywords: coordination failures; tragedy of the anticommons; tourism production; tourism destinations; Keynesian policies (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:21:y:2015:i:3:p:527-541

DOI: 10.5367/te.2015.0479

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