Abstract
The authors study and test one of the possible organizational solutions to the problem of asymmetric information between sellers and buyers: sellers (firms) use intermediaries' reputations instead of their own as a way to provide credible information to potential buyers concerning the true quality of their product. More specifically, the authors test the role of intermediaries in the hotel industry as providers of reputation regarding the true quality of a hotel establishment. The empirical results support their hypotheses by showing that reliance on an intermediary (a tour operator and a travel agency) in the distribution of the capacity of accommodation of a hotel establishment is: (i) higher for high-quality hotels (which face more acute problems from asymmetric information); and (ii) lower for establishments belonging to large and reputable hotel chains (which are themselves capable of building their own reputation and brand name).
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.