To Protect and Attract: Firms Cooperating in Nature-Based Tourism Destinations

Abstract

This article explores solutions to potential communication problems that arise from cooperation in nature-based tourism (NBT) destinations. The questions posed in this article are: "When is a local firm in an NBT destination likely to cooperate with other firms?" and "How can cooperation be facilitated among NBT firms?" The primary focus of our research, therefore, is how to facilitate cooperation in NBT destinations. To do so, we first review different risk elements by describing a simulated scenario in which two participants (NBT firms) confront a prisoner's dilemma with different options—cooperation and competition. The outcome of that scenario demonstrates that cooperation is only rational when the benefits of cooperation are greater than those for competition. Such situations do not occur in single games involving the prisoner's dilemma, but only in infinitely repeated games. Because cooperation may not be rational from a game theoretic perspective, policy makers and the firms involved should work actively to increase the benefits of cooperation. We conclude that cooperation is best achieved by having activities coordinated either by a strong, aggressive company or a strategic hierarchical network. Our logic is that coordinating activities from one point will increase the likelihood that partners have the same information and thus minimize conflicts.