Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5078565 | International Journal of Industrial Organization | 2008 | 21 Pages |
Abstract
Intermediaries often arise in order to facilitate trade in markets characterized by asymmetric information. In the travel industry, policymakers have tried to address information asymmetries by providing hotel ratings. We show that those ratings are noisy indicators of quality because of the use of nonuniform standards across countries and limited information available to policymakers. Tour operators use their specialized knowledge to produce better ratings which are useful for comparing hotels within a country, as well as across countries. Intermediation by tour operators provides a better matching of quality with price and leads to a more efficient market outcome.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Sofronis Clerides, Paris Nearchou, Panos Pashardes,