Online Engagement Investments of Online Travel Agencies: A Game-Theoretic Approach


Xiabing Zheng
Xiaolong Guo


The widespread prevalence of the Internet has led to the increasing dependence of customers on online travel agencies (OTAs) in their making purchasing decisions. OTAs that aim to increase market share and obtain higher profits need to find ways of maintaining loyal customers and at the same time attracting new ones. This study examines customer loyalty from the perspective of online engagement investment of OTAs. Although many studies in the marketing literature have described the influence of customer engagement on customer loyalty, the majority of these studies rely on theoretical conceptual frameworks or empirical research, and do not provide any solutions for optimizing engagement investment. Thus, in this study, we examined how OTAs make investment decisions with regard to encouraging online engagement of customers. In addition, we analyzed the market evolution and game equilibrium of a given online travel market with respect to the results of the optimal decisions. We believe that the findings of this study have important implications for e-commerce researchers and practitioners, particularly for operators of OTAs.

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August, 2016

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