Price Discrimination by Search Type

Many travel websites let you order your search results by price, by travel time, by quality and other variables.  Ross Parker has discovered that on at least one website prices differ depending on how you ask your search to be ordered.  In particular, if you ask for prices to be listed from lowest to highest you get lower prices, on exactly the same hotels, than when you ask for highest to lowest prices.  Of course, this is consistent with a very clever price discrimination scheme.

Comments are open.  I am interested to know whether anyone can verify the same phenomena on other websites.  Here is Ross’s data.

The site is Metro Getaways, a newspaper-linked travel site operated in the UK by Driveline. The prices are for a two-night break in Madrid on 4th August 2006, with flights from London.

Hotel Rating Price (Lowest First) Price (Highest First)
Francisco 1 Hotel 2* £146.80 £169.50
Asturias Hotel 2* £147.65 £170.35
Tryp Washington 3* £174.00 £196.70
Tryp Rex 3* £174.00 £196.70
Tryp Menfis 4* £184.20 £206.90
Tryp Ambassador 4* £189.30 £212.00
Vincci Soho 4* £192.70 £215.40
Gran Melia Fenix 5* £257.30 £280.00

Comments

Many hotels have different prices for different room types (as anyone who has ever used a hotel room search engine knows).

Is it possible that this search engine parses "highest" as "highest within the available range" as well as in the larger sense?

Very clever indeed ! However this relies heavily on incomplete information of the customer..
If this type of discrimination was to become popular, people will be aware of it and it won't work anymore (it will only make travel websites much more complicated to use, as rational agents will have to look for the smallest possible price for a given ticket..)

Similar experience to Gould -- which I take as quite common these days -- at the site mercantila.com, I found the same exercise bench listed in the "yoga" section of the website for $349 (a fairly common price for this product), and the exact same bench in the "exercise equipment" section of the site for $269 (an extrememly good price for this product). I purchased the lower-priced one, although I honestly considered calling them up to 'innocently' inquire as to the differences between the two products, just to give some poor salesperson a hard time.

I wonder when someone will write and sell third-party software to automate searches on these sorts of websites in 99 different ways and find the real lowest price. There's an opportunity for someone who can code...

Midwest Airlines discriminates based on whether or not you indicate that you will have a child sitting in your lap. A flight sans child that costs $150 will be $175 if the lap-child box is checked

Interesting- A year or so I went on Travelocity or Orbitz to buy a ticket (can't remember which). I did a first search with a restriction on airlines, but wasn't really happy with flight times. My second search turned up poor options, AND the exact same flights as my first search were suddenly much more expensive. I then replicated my first search - much higher prices again. Luckily, I was able to hit the "back" button to the results of my first search and purchase the lower priced tickets. I've flown twice since then, but purchased tickets directly through airline websites (and from first search results). I wonder if anyone else has had a similar problem with airfare aggregators - and whether anyone else thinks this could be considered fraud.

Not sure if its advanced programming that would make the difference or just a slightly more sophisticated SQL query. In any case, like David Hecht mentioned, hotels have more than one room type and some sites present all of them, not just the lowest price. Or some sites are sorting for the highest prices first when users want to see the highest price.

In any case, I expect the price-insensitive folks are not sorting on price anyway.

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