In this paper we test the intermediaries' role in the resolution of quality uncertainty between buyers and final sellers. Specifically, we focus our analysis on the distribution of the accommodation capacity in the Balearic Islands. The empirical results support our theoretical hypotheses by showing that reliance on an intermediary (a tour operator, a travel agency) in the distribution of the accommodation capacity of a hotel establishment is: (i) higher for high quality hotels (that face more acute problems from asymmetric information), (ii) lower for establishments belonging to large and reputable hotel chains (that themselves are capable of building their own reputation and brand name); and (iii) lower for hotels with a high amount of repeat visitors (who already enjoy reliable information about the hotel characteristics).

We study all-inclusive offerings in hospitality at a mature tourism destination; and we do so as a case of product bundling in competitive markets (accommodation and complementary services). We show that all-inclusive will more likely be part of the equilibrium the more value it creates; namely, when hotel establishments enjoy cost efficiencies with, and tourists a convenience value for, the all-inclusive bundle. In general, however, because of the interdependence in tourist demand generated by the presence of fixed costs at the product level, the market equilibrium may inefficiently include (or lack) the all-inclusive offerings. Moreover, market dynamics may generate a vicious circle where all-inclusive increases over time, thus leaving room for efficiency enhancing regulation.

We study both theoretically and empirically the relationship between different types of corporate social responsibility (CSR) and a firm's product quality. On the one hand, observable external CSR (e.g., a firm's involvement in a social project) can be used as a signal to unobservable product quality. On the other hand, internal CSR (e.g., human resources practices such as training and labor stability) can improve a firm's labor productivity, specially in firms supplying high quality. We show that CSR may serve as a tool for a firm's product differentiation strategy, finding that both internal and external CSR enhance a firm's product quality. Moreover, this implies the existence of complementarity between internal and external CSR (they mutually reinforce each other) through product quality. We test our theoretical results with data from the hotel industry where we show that hotel establishments with a higher product quality are indeed more likely to be socially responsible, both internally and externally, indicative of the existence of complementarity.

Many of the attributes that make a good “socially responsible” (SR) are credence attributes that cannot be learned by consumers either through search or experience. Consumers, then, use for their purchasing decisions “noisy” information about these attributes obtained from potentially contradictory channels (media, advertisement, NGOs). In this paper we model such informational framework and show the positive relationship between the accuracy of the information transmitted to consumers and corporate social responsibility. We also show that a firm may be tempted to add noise to the information channel (through lobbying of the media), which might reduce the supply of the SR attributes and even harm the firm itself (with lower profits). It might then be profitable to the firm to commit ex ante to not manipulate the information regarding the firm's business practices (e.g., with a partnership with an NGO). Finally, we extend our model to a competition framework endogenizing the number of firms active in the SR segment. We show both that in more transparent markets a larger number of firms will be SR, and that in a market with more intense competition, a higher degree of transparency is required in order to sustain a given number of SR firms.