This study applies Prospect Theory to examine how star rating classification affects the relationship between price dispersion, price fairness, and customers' decisions when choosing a hotel and booking channel. Data were collected from 207 hotel customers using Trivago’s metasearch engine in a scenario-based experimental design to test the hypotheses. The findings show that star ratings significantly influence hotel booking choices, with customers favouring cheaper options in wide price dispersion scenarios and more expensive options in narrow price dispersion scenarios. This study contributes to the literature by extending Prospect Theory to metasearch platforms and revealing how star ratings moderate the effects of price dispersion and fairness on the booking channel. The results provide valuable insights for hotel managers and online travel agency practitioners in developing effective marketing and pricing strategies.

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Price dispersion,Price fairness,Star ratings,Customer decision-making,Online travel agency,Metasearch engine

• Economics and Business - Social Sciences
• Social and Economic Geography - Social Sciences
• Other Social Sciences - Social Sciences