| Title: |
Price parity clauses for hotel room booking: empirical evidence from regulatory change |
| Authors: |
Ennis, Sean; Ivaldi, Marc; Lagos, Vicente |
| Contributors: |
University of East Anglia Norwich (UEA); Toulouse School of Economics (TSE-R); Université Toulouse Capitole (UT Capitole); Communauté d'universités et établissements de Toulouse (Comue de Toulouse)-Communauté d'universités et établissements de Toulouse (Comue de Toulouse)-École des hautes études en sciences sociales (EHESS)-Centre National de la Recherche Scientifique (CNRS)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE); Institut Polytechnique de Paris (IP Paris); ANR-17-EURE-0010,CHESS,Toulouse Graduate School défis en économie et sciences sociales quantitatives(2017) |
| Source: |
ISSN: 0929-1261. |
| Publisher Information: |
CCSD; Springer Verlag |
| Publication Year: |
2023 |
| Subject Terms: |
Digital platforms; Online Travel Agency (OTA); Impact Evaluation; Hotel Industry; Most favored customer (MFC); Most favored nation (MFN); Price Parity Clause (PPC); JEL: K - Law and Economics/K.K2 - Regulation and Business Law/K.K2.K21 - Antitrust Law; JEL: L - Industrial Organization/L.L1 - Market Structure; Firm Strategy; and Market Performance/L.L1.L14 - Transactional Relationships • Contracts and Reputation • Networks; JEL: L - Industrial Organization/L.L4 - Antitrust Issues and Policies/L.L4.L42 - Vertical Restraints • Resale Price Maintenance • Quantity Discounts; JEL: L - Industrial Organization/L.L8 - Industry Studies: Services/L.L8.L81 - Retail and Wholesale Trade • e-Commerce; [SHS.ECO]Humanities and Social Sciences/Economics and Finance |
| Description: |
National audience ; This paper examines the impact of most favored nation (MFN) clauses on retail prices, taking advantage of two natural experiments that changed vertical contracting between hotels and major digital platforms. The broad E.U. intervention narrowed the breadth of “price parity” obligations between hotels and major Online Travel Agencies (OTAs). Direct sales by hotels to customers subsequently became relatively cheaper. Comparisons with hotel pricing outside the E.U. confirm the reduction in prices for mid-level and luxury hotels. France and Germany went further and eliminated all price-parity agreements. This stronger intervention was associated solely with a significant additional price-reducing effect for mid-level hotels in Germany. Overall, wide MFNs are associated with higher retail prices. Regulating MFNs reduced prices with primary effects coming either from the narrow price-parity intervention or, perhaps, from direct sales becoming cheaper than OTAs in both E.U. and non-E.U. countries, and, interestingly, not from complete elimination of MFNs. |
| Document Type: |
article in journal/newspaper |
| Language: |
English |
| Relation: |
WOS: 001059655300004 |
| DOI: |
10.1086/723456 |
| Availability: |
https://hal.science/hal-04315828; https://hal.science/hal-04315828v1/document; https://hal.science/hal-04315828v1/file/tse_wp_1106.pdf; https://doi.org/10.1086/723456 |
| Rights: |
https://about.hal.science/hal-authorisation-v1/ ; info:eu-repo/semantics/OpenAccess |
| Accession Number: |
edsbas.29C1CC8C |
| Database: |
BASE |