Mariano Tappata, Sauder School of Business, University of British Columbia
Mariano Tappata, Sauder School of Business, University of British Columbia
Price Discrimination and Opaque Platforms. Evidence from the Hotel Industry
Price Discrimination and Opaque Platforms. Evidence from the Hotel Industry
23 Sep 201412:00 PM – 1:30 PM
Faculty and doctoral students only
Location:
Baker Library | Bloomberg Center 103
Organizer:
We study price discrimination using a unique dataset that matches hotel bookings made on opaque platforms (Priceline and Hotwire) with their counterparts in the transparent market.
Controlling for hotel selection, opaque bookings provide 44% savings to consumers. The price variation across markets and platforms is consistent with consumers sorting based on transaction costs and the dispersion of their valuations over transparent products. We argue that opaque selling helps hotels to segment demand but does not fully replace traditional, within-platform, price discrimination strategies.
Moreover, we find no evidence of opaque selling as a last-minute resource to dispose of unsold inventory.