Platform Price Parity Clauses and Market Segmentation

Event Date: 24 March 2021

Speaker: Ester Manna, University of Barcelona

Time: 4.00-5.00pm

Abstract: Price parity clauses (PPCs) are widely adopted by online platforms to force client sellers not to lower their prices elsewhere. We investigate under what conditions online travel agencies (OTAs) decide to apply PPCs, and how this affects hotels' listing decisions on OTAs. We find OTAs adopt PPCs when there is a sufficiently large competitive pressure in the market, either between OTAs, or between hotels (or both). PPCs allow OTAs to charge higher commission fees to hotels, which can respond by delisting from certain OTAs, thereby segmenting the market. We also find that consumers and hotels generally lose out with PPCs.
 

Zoom Link
https://strath.zoom.us/j/96117918505
Meeting ID: 961 1791 8505
Password: seminar

Published: 18 March 2021