Online platforms often impose Price Parity Clauses to prevent sellers from charging lower prices on alternative sales channels. We provide quasi-experimental evidence on the full removal of Price Parity Clauses in France in 2015 for hotels listed on Booking.com. Our analysis reveals significant price decreases in the short run, but a more limited effect in the medium run. However, hotels characterized by a more complex organizational structure decreased their prices more substantially. Overall, the intervention appears to have benefited a subset of consumers using Booking.com.
Online platform price parity clauses: Evidence from the EU Booking.com case
Piga Claudio;
2021-01-01
Abstract
Online platforms often impose Price Parity Clauses to prevent sellers from charging lower prices on alternative sales channels. We provide quasi-experimental evidence on the full removal of Price Parity Clauses in France in 2015 for hotels listed on Booking.com. Our analysis reveals significant price decreases in the short run, but a more limited effect in the medium run. However, hotels characterized by a more complex organizational structure decreased their prices more substantially. Overall, the intervention appears to have benefited a subset of consumers using Booking.com.
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