Opaque Selling: Static or Inter-Temporal Price Discrimination?

Pascal Courty and Wenyu Liu

No 9463, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study opaque selling in the hotel industry using data from Hotwire.com. An opaque room discloses only the star level and general location of the hotel at the time of booking. The exact identity of the hotel is disclosed after the booking is completed. Opaque rooms sell at a discount of 40 percent relative to regular rooms. The discount increases when hotels are more differentiated. This finding is consistent with static models of price discrimination. No support was found for predictions specific to inter-temporal models of opaque selling.

Keywords: Inter-temporal price discrimination; Opacity; Opaque selling; Product differentiation (search for similar items in EconPapers)
JEL-codes: L0 L15 L83 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-mkt
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Citations: View citations in EconPapers (2)

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