Author(s)

Zhibo Yao, Ke Hu, Qi Chen

Corresponding Author

Zhibo Yao

Abstract

Overtourism has emerged as a major challenge for sustainable tourism, threatening both environmental integrity and local economic balance. This study focuses on Juneau, Alaska, proposing a taxation-based framework to mitigate the negative impacts of excessive tourism. We develop a Three-Party Game Model (TTE-Game) involving the tourism industry, tourists, and the environment. Each stakeholder's profit function and constraints are constructed, and the Nash equilibrium is derived using Newton’s method and dynamic system simulation. To evaluate policy impacts holistically, we apply the Analytic Hierarchy Process (AHP) to integrate stakeholder states into a unified revenue function. Through grid search and spline interpolation, the optimal environmental tax policy is identified: a 0.3 tax rate on the tourism industry and a $30 daily fee per tourist, achieving a favorable balance between economic and ecological outcomes. The model is further extended to simulate tourist redistribution between two destinations—Sanya (over-touristed) and Monkey Island (underdeveloped). Both apply the TTE-Game framework, and surplus tax revenue is used for publicity and subsidies. Using dynamic programming and optimal substructure principles, we determine a strategy that maximizes total revenue. Results suggest a 25% tax rate ($5.23 per tourist) in Sanya and 20% ($2.48) in Monkey Island. This research highlights how game theory and adaptive taxation can support decision-making in sustainable tourism planning, offering practical insights for managing resource allocation and environmental conservation.

Keywords

Sustainable Tourism, Nash Equilibrium, Dynamic Programming, Environmental Taxation