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Substitution Between Online Distribution Channels: Evidence from the Oslo Hotel Market

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Abstract

Using an exhaustive database of bookings in one large chain of hotels active in Oslo (2013-2016), we estimate a nested-logit demand model that allows us to evaluate substitution patterns between online distribution channels. Making use of the chains’ decision to delist from Expedia’s platform, we can then compare simulated and actual effects of such an event on prices and market shares and identify ways to improve on simulated counterfactual outcomes.

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  • Cazaubiel, Arthur & Cure, Morgane & Johansen, Bjørn Olav & Vergé, Thibaud, 2018. "Substitution Between Online Distribution Channels: Evidence from the Oslo Hotel Market," Working Papers in Economics 8/18, University of Bergen, Department of Economics.
    • Handle: RePEc:hhs:bergec:2018_008
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    Cited by:

    1. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    2. Padilla, Jorge & Piccolo, Salvatore, 2020. "Does direct connect benefit travellers?," Economics Letters, Elsevier, vol. 188(C).
    3. Michele Bisceglia & Jorge Padilla & Salvatore Piccolo, 2019. "When Prohibiting Platform Parity Agreements Harms Consumers," CSEF Working Papers 542, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Carlotta Mariotto & Marianne Verdier, 2020. "Platform–merchant competition for sales services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(4), pages 834-853, October.
    5. Andrea Mantovani & Claudio Piga & Carlo Reggiani, 2019. "Much ado about nothing? Online platform price parity clauses and the EU Booking.com case," Economics Discussion Paper Series 1909, Economics, The University of Manchester.

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    More about this item

    Keywords

    Multi-channel distribution; Pricing; Structural demand estimation; Online substitution;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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