The role of electronic word of mouth in reducing information asymmetry: an empirical investigation of online hotel booking.
By Eran Manes, Anat Tchetchik. 2018
147 citations recorded by the source corpus.
Abstract The hotel industry is plagued with asymmetric information, which may distort prices and reduce incentives to provide quality service. However, both branding and hotel star ratings play an important role in reducing information asymmetry. The question addressed here is whether electronic word-of-mouth (eWOM) - an increasingly popular form of online feedback -contributes to any further reduction in information asymmetry; and, if so, in what manner. Using a dataset of listed prices and guests' ratings extracted from Booking.com , including several covariates, we show that the price–reputation gradient is much steeper in lower star-rated hotels than in higher star-rated hotels. The gradient is also steeper in unbranded hotels than in branded hotels. As lower star-rated and unbranded hotels are laden with greater quality uncertainty, this finding lends support to the hypothesis that the greater the information asymmetry, the greater the role of eWOM in reducing that uncertainty. Managerial implications are discussed.
Subfields: Marketing, Safety Research, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/86f955c886d6aaed6df1602b59bd74bf0d93c299
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In Marketing
In Safety Research
In Sociology and Political Science
Citations in the corpus
- Effect of eWOM stimuli and eWOM response on perceived service quality and online recommendation (2020, methodology): “In the specific case of hotel booking, tourists who are looking for travel reviews often check both valence and volume for evaluating the credibility of reviews posted on travel booking websites (Manes & Tchetchik, 2018).”