Peer-to-Peer Markets

Posted: 18 Nov 2016

See all articles by Liran Einav

Liran Einav

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Chiara Farronato

National Bureau of Economic Research (NBER); Harvard University

Jonathan Levin

Stanford University - Department of Economics; Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: October 2016

Abstract

Peer-to-peer markets such as eBay, Uber, and Airbnb allow small suppliers to compete with traditional providers of goods or services. We view the primary function of these markets as making it easy for buyers to find sellers and engage in convenient, trustworthy transactions. We discuss elements of market design that make this possible, including search and matching algorithms, pricing, and reputation systems. We then develop a simple model of how these markets enable entry by small or flexible suppliers, and how they impact existing firms. Finally, we consider the regulation of peer-to-peer markets and the economic arguments for different approaches to licensing and certification, data, and employment regulation.

Suggested Citation

Einav, Liran and Farronato, Chiara and Levin, Jonathan D., Peer-to-Peer Markets (October 2016). Annual Review of Economics, Vol. 8, pp. 615-635, 2016. Available at SSRN: https://ssrn.com/abstract=2870851 or http://dx.doi.org/10.1146/annurev-economics-080315-015334

Liran Einav (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
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Stanford, CA 94305-6072
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650-723-3704 (Phone)
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National Bureau of Economic Research (NBER)

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Chiara Farronato

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
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Jonathan D. Levin

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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