| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 1006975 | Annals of Tourism Research | 2015 | 20 Pages |
•We investigates the impact of the adoption of a direct online channel.•A direct online channel reduces price premium charged by intermediaries.•The impact varies across consumer segments and product markets.•The price dispersion increase is higher for products sold by intermediaries.•The intermediaries are not necessarily worse off.
This paper investigates the impact of adding a direct online channel on a firm and its intermediaries. We develop a set of testable hypotheses and then empirically test them on a longitudinal transaction dataset from the hospitality industry. Our results show that the introduction of a direct online channel significantly reduces the price premium charged by intermediaries, and the impact varies across consumer segments and product markets. More interestingly, we find that, after the adoption of a direct online channel: (1) the intermediaries are not necessarily worse off; (2) price dispersion increases for products sold through both intermediaries and direct channels; and (3) the price dispersion increase is higher for products sold by intermediaries.
