{"title":"Shirking with good reputation? Evidence from hotel industry","authors":"Fang-Chang Kuo","doi":"10.1016/j.ijindorg.2024.103088","DOIUrl":null,"url":null,"abstract":"<div><p>This paper investigates the relationship between reputation and investment in quality within the hotel industry. Utilizing a panel dataset of hotel investment expenditures and online consumer ratings, I employ a regression discontinuity design, which leverages TripAdvisor's rating display system to identify the causal relationship between online ratings and hotels' investment decisions. The empirical findings indicate that higher ratings negatively impact investment expenditures, whereas lower ratings tend to stimulate investment. This observed shirking behavior among hotels with better ratings may be ascribed to diminishing marginal returns on investment and reduced competitive pressures.</p></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"97 ","pages":"Article 103088"},"PeriodicalIF":1.4000,"publicationDate":"2024-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Industrial Organization","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0167718724000432","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper investigates the relationship between reputation and investment in quality within the hotel industry. Utilizing a panel dataset of hotel investment expenditures and online consumer ratings, I employ a regression discontinuity design, which leverages TripAdvisor's rating display system to identify the causal relationship between online ratings and hotels' investment decisions. The empirical findings indicate that higher ratings negatively impact investment expenditures, whereas lower ratings tend to stimulate investment. This observed shirking behavior among hotels with better ratings may be ascribed to diminishing marginal returns on investment and reduced competitive pressures.
期刊介绍：
The IJIO is an international venture that aims at full coverage of theoretical and empirical questions in industrial organization. This includes classic questions of strategic behavior and market structure. The journal also seeks to publish articles dealing with technological change, internal organization of firms, regulation, antitrust and productivity analysis. We recognize the need to allow for diversity of perspectives and research styles in industrial organization and we encourage submissions in theoretical work, empirical work, and case studies. The journal will also occasionally publish symposia on topical issues.
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