Research of travel agencies reputation under two-stage signaling game

The reputation information of travel agencies can provide potential tourists with effective identification signal and can also alleviate adverse selection problems caused by asymmetric information in the travel services market. Therefore, this paper establishes reputation model of two-stage signal game based on two cases that three types of travel agencies ignore the reputation and establish reputation. Next, we do a comparative analysis of travel agencies´ utility of two stages in the two cases, ignoring reputation and establishing reputation. Then we can get the intuitive results from numerical experiment. The results show that travel agencies´ utility of the first stage will reduce by establishing reputation. But in the second stage, the travel agencies will gain more utility, and the total utility of two-stage will be significantly greater than the total utility of the travel agencies without building reputation.