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Online platform price parity clauses: Evidence from the EU Booking.com case

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  • Mantovani, Andrea
  • Piga, Claudio A.
  • Reggiani, Carlo

Abstract

Online platforms often impose Price Parity Clauses to prevent sellers from charging lower prices on alternative sales channels. We provide quasi-experimental evidence on the full removal of Price Parity Clauses in France in 2015 for hotels listed on Booking.com. Our analysis reveals significant price decreases in the short run, but a more limited effect in the medium run. However, hotels characterized by a more complex organizational structure decreased their prices more substantially. Overall, the intervention appears to have benefited a subset of consumers using Booking.com.

Suggested Citation

  • Mantovani, Andrea & Piga, Claudio A. & Reggiani, Carlo, 2021. "Online platform price parity clauses: Evidence from the EU Booking.com case," European Economic Review, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:eecrev:v:131:y:2021:i:c:s0014292120302555
    DOI: 10.1016/j.euroecorev.2020.103625
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    Cited by:

    1. Morgane Cure & Matthias Hunold & Reinhold Kesler & Ulrich Laitenberger & Thomas Larrieu, 2022. "Vertical integration of platforms and product prominence," Quantitative Marketing and Economics (QME), Springer, vol. 20(4), pages 353-395, December.
    2. Renato Gomes & Andrea Mantovani, 2022. "Regulating Platform Fees under Price Parity," Working Papers hal-03629525, HAL.
    3. Bourreau, Marc & Manenti, Fabio M., 2023. "Selling cross-border in online markets: The impact of the ban on geoblocking strategies," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    4. Mantovani, Andrea & Reggiani, Carlo & Broocks, Annette & Duch-Brown, Nestor & Ma, Peiyao, 2022. "The Price Effects of Banning Price Parity Clauses in the EU: Evidence from International Hotel Groups," TSE Working Papers 22-1371, Toulouse School of Economics (TSE).
    5. Joan Calzada & Ester Manna & Andrea Mantovani, 2022. "Platform price parity clauses and market segmentation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(3), pages 609-637, August.
    6. Gomes, Renato & Mantovani, Andrea, 2022. "Regulating Platform Fees under Price Parity," TSE Working Papers 22-1325, Toulouse School of Economics (TSE).

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    More about this item

    Keywords

    Price parity clauses; Online travel agents; Hotel pricing; Antitrust evaluation;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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