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Abstract

The advent of the Internet changed the way buyers and sellers interact. Although access to information seems unlimited, non-expert agents find it difficult to identify the information they can confidently use. A third-party expert or a cybermediary (an intermediary in the cyberspace) can help sort out the information for the contracting partners. In this paper, we study the case of the online hotel market and the role of the cyber travel agent (CTA). We claim that CTAs encourage hoteliers to exert effort in service quality and provide empirical evidence that these hotels are compensated with a price premium.

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