How social comparison influences reference price formation in a service context

What is the influence on reference price when the source of price information is anonymous versus social? This article investigates the formation of reference prices given an observed sequence of past prices in a service context. An experimental study suggests that, considering the same price information, if the source is social (i.e., the prices paid by colleagues), then consumers want to pay less. More specifically, social comparison changes the way individuals weigh information, attributing more importance to the lowest historical prices and to the range in price variations

Strategic and tactical price decisions in hotel revenue management

Dynamic pricing techniques allow using a number of variables in a tactical way compared to standard catalogue prices. This study merges in a conceptual model the relevance of the tactical and the strategic dimension of these variables, classified according to their tangible, reputational or contextual nature. To empirically validate the hypotheses, a database of 21.596 price observations was retrieved from booking.com. The study presents a hedonic price function, using the Shapley-Owen decomposition of the Rsquared to elicit the importance of each group of factors. Further, a hierarchical cluster analysis measures the presence of heterogeneity across operators. The results show that online reputation is gaining importance over the traditional star rating. Despite the tangible variables remain of paramount importance, the findings suggest the relevant role of contextual variables in short-run price variations. The players operating in the tourism and hospitality industries should integrate these findings when designing pricing strategies

Turning ideas into products:subjective well-being in co-creation

New services, like fabrication spaces, 3D printer rentals and virtual marketplaces, have made it easier for empowered consumers to co-create innovative products without almost any involvement of traditional companies. Adopting a consumer-grounded view, this work takes a step forward from the existing service literature by investigating the link between psychological motives and happiness in co-creation. Specifically, the study measures how community affiliation, personal growth, and utilitarian motives are predictors of subjective well-being. The results illustrate that community affiliation and personal growth motives predict high scores of subjective well-being, while utilitarian motives do not. In addition, empowered consumers who co-create with others are happier than consumers who create alone. This indicates that direct interactions are not only a powerful platform for service co-creation, but are also predictors of subjective well-being. We discuss the implications for traditional companies and for decision makers regarding the benefits offered by digital fabrication services

The influence of e-word-of-mouth on hotel occupancy rate

Purpose Online consumer reviews have become increasingly important for consumer decision-making. One of the most prominent examples is the hotel industry where consumer reviews on websites, such as Bookings.com, TripAdvisor and Venere.com, play a critical role in consumers’ choice of a hotel. There have been a number of recent studies analyzing various aspects of online reviews. The purpose of this paper is to investigate their effects in terms of hotel occupancy rates. Design/methodology/approach This paper measures through regression analysis the impact of three dimensions of consumer reviews (i.e. review score, review variance and review volume) on the occupancy rates of 346 hotels located in Rome, isolating a number of other factors that might also affect demand. Findings Review score is the dimension with the highest impact. The results suggest that after controlling for other variables, a one-point increase in the review score is associated to an increase in the occupancy rate by 7.5 percentage points. Regardless the review score, the number of reviews has a positive effect, but with decreasing returns, implying that the higher the number of reviews, the lower the beneficial effect in terms of occupancy rates is. Practical implications The findings quantify the strong association of online reviews to occupancy rates suggesting the use of appropriate reputational management systems to increase hotel occupancy and therefore performance. Originality/value A major contribution of this paper is its comprehensiveness in analyzing the relation between online consumer reviews and occupancy across a heterogeneous sample of hotel

Personal or product reputation? Optimizing revenues in the sharing economy

The emergence of peer-to-peer platforms, known as the sharing economy, has empowered people to market their own products and services. However, there are information asymmetries that make it difficult to evaluate the reputation of the seller a priori. This article examines how sellers have to enhance their personal reputation to optimize revenues. The study proposes a revenue model where, given a frontier that depends on the shared assets, the maximization of revenues depends on reputational factors of the person and of the product. An empirical validation of the framework has been conducted in the context of Airbnb, a popular sharing economy travel platform. The sample comprises 981 establishments across five European cities. The findings suggest the crucial importance of personal reputation along with some distinctive reputational attributes of the product itself. These results emphasize the role of trust and personal branding strategies in peer-to-peer platforms