Who Forgoes Screening in Online Markets and Why? Evidence from Airbnb

Mayya, Raveesh, Ye, Shun, Viswanathan, Siva and Agarwal, Rajshree, 2020. "Who Forgoes Screening in Online Markets and Why? Evidence from Airbnb. Evidence from Airbnb," MIS Quarterly (Forthcoming)

56 Pages Posted: 8 Dec 2017 Last revised: 16 Oct 2020

See all articles by Raveesh Mayya

Raveesh Mayya

New York University (NYU) - Leonard N. Stern School of Business

Shun Ye

George Mason University - Department of Information Systems and Operations Management

Siva Viswanathan

University of Maryland - Robert H. Smith School of Business

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business

Date Written: October 12, 2020

Abstract

Screening is considered a necessary mechanism for alleviating information asymmetry but has also raised concerns of increased discrimination in online peer-to-peer market platforms. Paradoxically, providers of goods and services may also voluntarily forgo screening, even though it increases the risks and costs associated with poor matches. We examine who may choose to forgo screening and why, and its impact on their performance outcomes. Our study’s empirical context is the Airbnb platform, wherein the “Instant Book” feature enables hosts to forgo the screening of guests. Utilizing a unique panel dataset of all listings in New York City during August 2015—February 2017, we first explore the antecedents of voluntarily switching to instant booking and then causally identify the impacts of switching. Our study provides evidence of the economic benefits of forgoing screening from increased occupancy even as reviewer ratings decline; these effects are stronger for Black and female hosts. We discuss the strategic and social welfare implications of these findings within the context of current conversations on discrimination and bias in the sharing economy.

Keywords: Information Asymmetry, Online Market, Sharing Economy, Screening, Discrimination, Empirical Analyses

Suggested Citation

Mayya, Raveesh and Ye, Shun and Viswanathan, Siva and Agarwal, Rajshree, Who Forgoes Screening in Online Markets and Why? Evidence from Airbnb (October 12, 2020). Mayya, Raveesh, Ye, Shun, Viswanathan, Siva and Agarwal, Rajshree, 2020. "Who Forgoes Screening in Online Markets and Why? Evidence from Airbnb. Evidence from Airbnb," MIS Quarterly (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3082018 or http://dx.doi.org/10.2139/ssrn.3082018

Raveesh Mayya

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Shun Ye

George Mason University - Department of Information Systems and Operations Management ( email )

4400 University Drive
Fairfax, VA 22030
United States

Siva Viswanathan (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

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