Platform Price Parity Clauses and Segmentation

Joan Calzada, Ester Manna and Andrea Mantovani

No 2019/387, UB School of Economics Working Papers from University of Barcelona School of Economics

Abstract: We investigate how the adoption of price parity clauses (PPCs) by established platforms affects the listing decisions of suppliers. PPCs have been widely adopted by online travel agencies (OTAs) to force client hotels not to charge lower prices in alternative sales channels. We find that OTAs adopt PPCs when they are perceived as highly substitutable, and in order to prevent showrooming. PPCs allow OTAs to charge hotels higher commission fees. However, hotels can respond by delisting themselves from some OTAs. Hence, our analysis reveals that the removal of PPCs enables more hotels to resort to OTAs. This is beneficial for consumers, as prices decrease in absence of PPCs.

Keywords: Price parity clauses; Online travel agencies; Segmentation; Vertical relations. (search for similar items in EconPapers)
JEL-codes: D40 L42 L81 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2019
New Economics Papers: this item is included in nep-com and nep-pay
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/2445/127887 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 read timeout (http://hdl.handle.net/2445/127887 [302 Found]--> https://diposit.ub.edu/dspace/handle/2445/127887)

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:ewp:wpaper:387web

Access Statistics for this paper

More papers in UB School of Economics Working Papers from University of Barcelona School of Economics Av. Diagonal 690, 08034 Barcelona. Contact information at EDIRC.
Bibliographic data for series maintained by University of Barcelona School of Economics ().