Buyer Subsidies in Two-Sided Markets: Evidence from Online Travel Agents

Volodymyr Bilotkach and Nicholas Rupp

A chapter in The Economics of International Airline Transport, 2014, vol. 4, pp 339-374 from Emerald Group Publishing Limited

Abstract: Platforms in two-sided markets are known to provide subsidies to either buyers or sellers, in order to take advantage of cross-group externalities inherent in such industries. Online travel agents can be thought of as platforms facilitating trade between passengers and travel service providers (airlines). This chapter evaluates the effects of a buyer subsidy provided by one major US online travel agent – a low-price guarantee offered by Orbitz. We find evidence consistent with increased airline participation with this travel agent upon implementation of the low-price guarantee policy. Our results also confirm the theoretical claims that most-favored customer low-price guarantee policies are procompetitive.

Keywords: Two-sided markets; price matching; price guarantees; most-favored customer; meet or release; D4; L4; L93 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... 2-160920140000004012
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:aiaezz:s2212-160920140000004012

DOI: 10.1108/S2212-160920140000004012

Access Statistics for this chapter

More chapters in Advances in Airline Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().