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

Matthias Hunold (), Reinhold Kesler and Ulrich Laitenberger
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Matthias Hunold: Heinrich-Heine-Universität Düsseldorf, Düsseldorf Institute for Competition Economics, 40225 Düsseldorf, Germany

Marketing Science, 2020, vol. 39, issue 1, 92–116

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.

Keywords: consumer protection; free riding; hotel booking; online travel agents; ranking; search bias (search for similar items in EconPapers)
Date: 2020
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Handle: RePEc:inm:ormksc:v:39:y:2020:i:1:p:92-116