Exploring the Role of Trust Indicators in the P2P Economy: Analysis and Simulations of an Airbnb Market

43 Pages Posted: 26 Oct 2020

See all articles by Aliza Fleischer

Aliza Fleischer

Hebrew University of Jerusalem _ Departement of Environmental Economics and Management

Eyal Ert

The Hebrew University of Jerusalem, Dept. of Environmental Economics and Management

Ziv Bar-Nahum

Hebrew University - Department of Environmental Economics and Management

Date Written: June 30, 2020

Abstract

We propose a structural econometric model in which listings in an Airbnb market differ not only in their attributes, but also in their seller’s characteristics as trust indicators. Applying the model to Stockholm’s Airbnb market reveals that hosts’ attributes significantly affect market performance. Simulations of market scenarios show that the very high review scores and the Superhost certification help Airbnb compete with hotels and increase its market welfare. We also show that the “Airbnb plus” luxury program, which makes the apartments a closer substitute for hotels, leads to an increase in Airbnb’s market welfare. Our analysis provides a framework for understanding the full impact of the different attributes of the products, their providers and their management in the sharing-economy accommodation market.

Keywords: Airbnb; trust; structural econometric model; differentiated goods market

JEL Classification: D22, L11

Suggested Citation

Fleischer, Aliza and Ert, Eyal and Bar-Nahum, Ziv, Exploring the Role of Trust Indicators in the P2P Economy: Analysis and Simulations of an Airbnb Market (June 30, 2020). Available at SSRN: https://ssrn.com/abstract=3683366 or http://dx.doi.org/10.2139/ssrn.3683366

Aliza Fleischer (Contact Author)

Hebrew University of Jerusalem _ Departement of Environmental Economics and Management ( email )

P.O. Box 12
Rehovot, 7610001
Israel

Eyal Ert

The Hebrew University of Jerusalem, Dept. of Environmental Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

Ziv Bar-Nahum

Hebrew University - Department of Environmental Economics and Management ( email )

Jerusalem
Israel

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