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Price dispersion, competition, and the role of online travel agents: Evidence from business routes in the Italian airline market

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  • Roma, Paolo
  • Zambuto, Fabio
  • Perrone, Giovanni

Abstract

In this article, using data from the Italian airline market, we study the role of online travel agents (OTAs) in driving price dispersion as compared to the effect of airlines’ websites. Specifically, we investigate how distinctive factors between OTAs and airlines’ direct channels influence price dispersion. We find that after controlling for OTAs’ features related to airline competition, price dispersion should be lower in the OTA channel relative to airlines’ direct channels. On the other hand, we also find that OTAs’ features related to the presence of airline competition play in favor of higher price dispersion in such indirect channel.

Suggested Citation

  • Roma, Paolo & Zambuto, Fabio & Perrone, Giovanni, 2014. "Price dispersion, competition, and the role of online travel agents: Evidence from business routes in the Italian airline market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 146-159.
    • Handle: RePEc:eee:transe:v:69:y:2014:i:c:p:146-159
    DOI: 10.1016/j.tre.2014.06.004
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    Cited by:

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    3. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Guoquan & Zhang, Yahua, 2020. "Understanding airline price dispersion in the presence of high-speed rail," Transport Policy, Elsevier, vol. 95(C), pages 93-102.
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    10. Jana Prodanova & Sonia San-Martín & Nadia Jiménez, 2017. "Enfoque teórico multidisciplinar para la provisión electrónica de servicios," DOCFRADIS Working Papers 1705, Catedra Fundación Ramón Areces de Distribución Comercial, revised Oct 2017.
    11. Tomasz Stanisław Szopiński & Robert Nowacki, 2015. "The Influence of Purchase Date and Flight Duration over the Dispersion of Airline Ticket Prices," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(3), September.

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