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Let your algorithm shine: The impact of algorithmic cues on consumer perceptions of price discrimination
Institution:1. School of Hotel and Tourism Management at the Chinese University of Hong Kong, Hong Kong;2. Department of Tourism Management at Dong-A University, South Korea;1. CETT Barcelona School of Tourism, Hospitality and Gastronomy, Universitat de Barcelona, Av. de Can Marcet, 36-38, 08035 Barcelona, Spain;2. Howard Feiertag Department of Hospitality and Tourism Management, Pamplin College of Business, Virginia Tech, Blacksburg, VA 24061, USA;1. School of Hotel and Tourism Management ,The Hong Kong Polytechnic University ,17 Science Museum Road, TST East, Kowloon, Hong Kong, China;2. The School of Hospitality Management Pennsylvania State University 201 Mateer Building, University Park, PA, 16802, USA;3. Recreation, Park, and Tourism Management, The Pennsylvania State University 704M Ford, University Park, PA, 16802, USA;1. Postdoctoral Research Fellow, Griffith Institute for Tourism, Griffith University, 170 Kessels Rd, Nathan, Brisbane, QLD, 4111, Australia;2. School of Hotel and Tourism Management, The Hong Kong Polytechnic University, 11 Yuk Choi Road, Hung Hom, Hong Kong;3. Department of Tourism, Sport & Hotel Management, Griffith Business School, Griffith University, Nathan Campus, 170 Kessels Rd, Nathan, Brisbane, QLD, 4111, Australia;4. Griffith Institute for Tourism, Griffith University – Gold Coast Campus, 58 Parklands Drive, Southport, Queensland, 4222, Australia;5. Department of Marketing, Griffith Business School, Griffith University – Nathan Campus, 170 Kessels Rd, Nathan, Brisbane, QLD, 4111, Australia;1. School of Tourism Management, Sun Yat-sen University, Building 329, 135 Xingangxi Road, Guangzhou, 510275, PR China;2. Key Laboratory of Sustainable Tourism Smart Assessment Technology, Ministry of Culture and Tourism of China, Beijing, PR China;3. Mt.Huangshan Scenic Area Administrative Committee, Huangshan, Anhui, 245899, PR China;1. Department of Communication Science, Faculty of Social Sciences, Vrije Universiteit Amsterdam, De Boelelaan 1105, 1081 HV Amsterdam, Netherlands;2. Department of Marketing, Faculty of Business and Economics, University of Antwerp, Stadscampus - B236, Prinsstraat 13, 2000 Antwerpen, Belgium;3. Department of Marketing, Faculty of Business and Economics, University of Antwerp, Stadscampus - B235, Prinsstraat 13, 2000 Antwerpen, Belgium;4. Medill IMC Spiegel Research Center, Medill School of Journalism, Northwestern University 1845 Sheridan Road, Evanston, IL, 60208, USA
Abstract:How can hospitality and tourism firms reduce consumers’ perceptions of unfairness regarding their price discrimination practices? We propose that pricing algorithms, as advanced revenue management tools, can play a role. We demonstrated the effects of an algorithmic cue through a tweet analysis and four experiments. We found that informing consumers that the offered price is determined by algorithms mitigated their negative responses in the disadvantaged price discrimination context. Also, such algorithmic cue effects only occur when the algorithm is less anthropomorphic (vs. highly anthropomorphic or human). The positive impact of an algorithmic cue was identified not only when customers directly experienced disadvantaged price discrimination but also when they obtained the information from different channels. The results suggest hospitality and tourism firms that have implemented pricing algorithms in their revenue management can benefit from disclosing an algorithmic cue to customers.
Keywords:Revenue management  Price discrimination  Algorithmic pricing  Algorithm  Price fairness
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