In 1999, a class-action lawsuit supported by the Association of Retail Travel Agents alleged that more than a dozen airlines had illegally conspired to cut travel agents’ commissions.1 In 2003, at the end of a long legal battle between the agents and the airlines, the federal judge sided with the airlines, saying that the commission cuts could have come not from collusion but from simple oligopolistic competition and natural changes in the travel market: with the proliferation of sites like Expedia and Travelocity, the airlines no longer needed traditional travel agencies to bring in customers, and as soon as one airline stopped paying commissions, others had every incentive to quickly follow suit.
KeywordsSupply Chain Real Estate Sale Price Travel Agent Trip Planning
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- 7.This comment is widely attributed to the technical writer Alfred Glossbrenner though the original quotation may not have been as pithy. In a 1995 book, Glossbrenner and a coauthor write, “Your opponent is the vast quantity of information that’s out there. That’s why we’ve suggested the commando motif. With so much information now online, if you don’t know what you’re doing, it is exceptionally easy to simply dive in—and drown.” See Alfred Glossbrenner and John Rosenberg, Online Resources for Business: Getting the Information Your Business Needs to Stay Competitive (New York: Wiley, 1995).Google Scholar
- 9.Herbert A. Simon, “Designing Organizations for an Information-Rich World,” in Martin Greenberger (ed.), Computers, Communications, and the Public Interest (Baltimore: Johns Hopkins University Press, 1971), 40–41.Google Scholar
- 14.Marketing scholars have found that customers interpret higher prices as an implicit promise of a higher level of service quality, hence the dissatisfaction from paying a high price to get a relatively low level of service. See Valerie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “The Nature and Determinants of Customer Expectations of Service,” Journal of the Academy of Marketing Science 21, no. 1 (1993): 1–12.CrossRefGoogle Scholar