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Agent Pricing in the Sharing Economy: Evidence from Airbnb

  • Jun Li
  • Antonio Moreno
  • Dennis J. Zhang
Chapter
Part of the Springer Series in Supply Chain Management book series (SSSCM, volume 6)

Abstract

One of the major differences between markets that follow a “sharing economy” paradigm and traditional two-sided markets is that the supply side in the sharing economy often includes individual nonprofessional decision makers, in addition to firms and professional agents. Using a data set of prices and availability of listings on Airbnb, we find that there exist substantial differences in the operational and financial performance of professional and nonprofessional hosts. In particular, properties managed by professional hosts earn 16.9% more in daily revenue, have 15.5% higher occupancy rates, and are 13.6% less likely to exit the market compared with properties owned by nonprofessional hosts, while controlling for property and market characteristics. We demonstrate that these performance differences between professionals and nonprofessionals can be partly explained by pricing inefficiencies. Specifically, we provide empirical evidence that nonprofessional hosts are less likely to offer different rates across stay dates based on the underlying demand patterns, such as those created by major holidays and conventions.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Ross School of BusinessUniversity of MichiganAnn ArborUSA
  2. 2.Harvard Business SchoolBostonUSA
  3. 3.Olin Business SchoolWashington University in St. LouisSt. LouisUSA

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