Service intermediaries: a theoretical modeling framework with an application to travel agents

Purpose – The purpose of this paper is to study the motivations of an agent in a service industry to honestly represent the quality of a service provider. Design/methodology/approach – The paper develops a theoretical modeling and derives implications from it, which are then tested using empirical data. Findings – The main finding of the paper is that the agent's propensity to overstate the service provider's true quality level increases as the relative price of the service increases. Research limitations/implications – The testable implications are tested in the hotel industry. One could extend this to alternative services. It should be noted, however, that since the modeling framework is general, so too will be the implications that arise from it. Originality/value – The theoretical development in the paper from which the implications arise, gives the results a strong foundation and lends some validity to the work. This is complemented by a unique data set that supplies information from the agent as well as the consumer regarding the same transaction. This offers a unique opportunity to study the two different points of view, and test some propositions regarding the degree to which the players understand each other.