Strategic Interaction of Online Travel Platforms: Cancellation Policies Under Heterogeneous Reputation Sensitivity

The sustainable development of online travel platforms relies on consumer trust and a healthy ecosystem. However, challenging cancellation policies have become a significant issue, threatening the industry’s sustainability. Existing research often analyzes cancellation policies from a short-term profit perspective, lacking a dynamic evolutionary analysis. This study employs evolutionary game theory and the Hotelling model, introducing heterogeneity in reputation loss sensitivity to explore how platforms evolve optimal cancellation policies between strict and lenient policies. We find that in markets with low reliance on reputation, platforms tend to adopt differentiated policies, making it difficult for the equilibrium to be unified and lenient. As reputation becomes more important, the market exhibits policy imitation or differentiation, both of which are significantly influenced by user loyalty. In highly competitive environments, reputation becomes central, and even reputation-insensitive platforms may adopt lenient policies to gain market share. Notably, increased user loyalty drives the market toward more lenient cancellation policies. This research provides a theoretical basis for platforms to formulate sustainable policies in dynamic competition.