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Rankings of Online Travel Agents, Channel Pricing, and Consumer Protection

Author

Listed:
  • Matthias Hunold

    (Heinrich-Heine-Universität Düsseldorf, Düsseldorf Institute for Competition Economics, 40225 Düsseldorf, Germany)

  • Reinhold Kesler

    (Centre for European Economic Research, MaCCI Mannheim Centre for Competition and Innovation, 68161 Mannheim, Germany)

  • Ulrich Laitenberger

    (Centre for European Economic Research, MaCCI Mannheim Centre for Competition and Innovation, 68161 Mannheim, Germany
    Télécom ParisTech, 75013 Paris, France)

Abstract

We investigate whether online travel agents (OTAs) assign hotels worse positions in their search results if these set lower hotel prices at other OTAs or on their own websites. We formally characterize how an OTA can use such a strategy to reduce price differentiation across distribution channels. Our empirical analysis shows that the position of a hotel in the search results of OTAs is better when the prices charged by the hotel on other channels are higher. This is consistent with the hypothesis that OTAs alter their search results to discipline hotels for aggressive prices on competing channels, thereby reducing the search quality for consumers.

Suggested Citation

  • Matthias Hunold & Reinhold Kesler & Ulrich Laitenberger, 2020. "Rankings of Online Travel Agents, Channel Pricing, and Consumer Protection," Marketing Science, INFORMS, vol. 39(1), pages 92-116, January.
    • Handle: RePEc:inm:ormksc:v:39:y:2020:i:1:p:92-116
    DOI: 10.1287/mksc.2019.1167
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    References listed on IDEAS

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