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

Author

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  • 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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    Cited by:

    1. Sato, Susumu, 2022. "Joint-purchase benefits as an anti-steering device of platforms," Economics Letters, Elsevier, vol. 215(C).
    2. Aguiar, Luis & Waldfogel, Joel & Waldfogel, Sarah, 2021. "Playlisting favorites: Measuring platform bias in the music industry," International Journal of Industrial Organization, Elsevier, vol. 78(C).
    3. Maximilian Schäfer & Kevin Ducbao Tran, 2020. "Airbnb, Hotels, and Localized Competition," Discussion Papers of DIW Berlin 1889, DIW Berlin, German Institute for Economic Research.
    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. Matthias Hunold & Ulrich Laitenberger & Guillaume Thébaudin, 2022. "Bye-box: An Analysis of Non-Promotion on the Amazon Marketplace 03.06.2022," Working Papers hal-04104183, HAL.
    6. Avi Goldfarb & Ginger Jin & K. Sudhir, 2020. "Yale School of Management, Yale University, New Haven, Connecticut 06520," Marketing Science, INFORMS, vol. 39(1), pages 1-4, January.
    7. Gomes, Renato & Mantovani, Andrea, 2022. "Regulating Platform Fees under Price Parity," TSE Working Papers 22-1325, Toulouse School of Economics (TSE).
    8. Peitz, Martin, 2020. "Economic policy for digital attention intermediaries," ZEW Discussion Papers 20-035, ZEW - Leibniz Centre for European Economic Research.
    9. 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.
    10. Hildenbrand, Hannah-Maria & von Rueden, Christina & Viete, Steffen, 2021. "Measuring the online platform economy in Germany," Working Papers 07/2021, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    11. Joan Calzada & Nestor Duch-Brown & Ricard Gil, 2021. "Do search engines increase concentration in media markets?," UB School of Economics Working Papers 2021/415, University of Barcelona School of Economics.
    12. Martin Peitz, 2023. "Governance and Regulation of Platforms," CRC TR 224 Discussion Paper Series crctr224_2023_480, University of Bonn and University of Mannheim, Germany.
    13. Renato Gomes & Andrea Mantovani, 2022. "Regulating Platform Fees under Price Parity," Working Papers hal-03629525, HAL.
    14. Gomes, Renato & Mantovani, Andrea, 2020. "Regulating Platform Fees under Price Parity," CEPR Discussion Papers 15048, C.E.P.R. Discussion Papers.
    15. David Ronayne & Greg Taylor, 2022. "Competing Sales Channels with Captive Consumers," The Economic Journal, Royal Economic Society, vol. 132(642), pages 741-766.
    16. 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).

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