Market Segmentation : The Role of Opaque Travel Agencies

  title={Market Segmentation : The Role of Opaque Travel Agencies},
  author={DMITRY SHAPIRO},
  • Published 2006
This paper investigates the role of discount travel agencies such as Priceline and Hotwire in the market segmentation of the hotel and airline industries. These agencies conceal important characteristics of the offered services, such as hotel locations or flight schedules. We explicitly model this opaque feature and show that it enables service providers to price discriminate between those customers who are sensitive to service characteristics and those who are not. Service providers can profit… CONTINUE READING


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