Selling And Pricing On Online Opaque Channels
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Hotwire and Priceline, unlike other online travel sales channels such as Expedia, Travelocity and Orbitz, offer customers opaque products with aspects of the service provider concealed until the transaction has been completed. Selling on these opaque channels has become popular in service selling as it allows firms to sell their differentiated products at higher prices to regular brand loyal customers while simultaneously selling to non loyal customers at discounted prices. This dissertation investigates how to optimally price on opaque channels while selling a fixed inventory over a finite horizon. This study also examines impacts on a firm's demand and profits by using opaque selling in addition to regular selling from both analytical and empirical perspectives. An online choice experiment is designed to understand customer preferences and trade offs while choosing among different online distribution channels.
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