Is There a Strategic Interdependence Between the USA and Canada in the Tourism Sector? An Analysis Using Game Theory

ABSTRACT

Although many tourist regions compete among themselves, there is a scenario of strategic interdependence between them that has not usually been considered in the literature. In this way, this present article has used Game Theory in order to analyse the competition / cooperation between two tourist destinations – namely, between Canada and the USA. In methodological terms, the study has used the Vector Autoregressive model; the Vector Error Correction model; and Granger Analyses in order to forecast the short-term and long-term impacts of tourism receipts between the USA and Canada. The article has used databases from 2007 – 2016 concerning their Gross Domestic Product (GDP). The tourism receipts were obtained from Statistics Canada and UNWTO. The findings have indicated that (1) there was no Nash equilibrium of a GDP payoff for the USA and Canada; (2) The USA has a dominant strategy when developing tourism, but Canada does not.

KEYWORDS:

• Game Theory
• Canada
• USA
• interdependence

Disclosure statement

No potential conflict of interest was reported by the authors.