Vertical Integration of Platforms and Product Prominence

Abstract

Meta-search platforms (MSPs) help consumers to compare product prices between different sales platforms. MSPs are often integrated with one of the sales platforms, which can give rise to self-preferencing. A case in point is the online hotel booking industry, where the major online travel agencies (OTAs) are integrated with MSPs. Studying web-scraped data from the MSP Kayak, we find indications that for a given hotel, the offers of affiliated OTAs (like Booking.com) are more visible than those of other OTAs with the same price. Moreover, hotels appear to be less prominent in Kayak’s search results when the rival OTA Expedia has the lowest price.