An Empirical Study of the Antecedents and Consequences of Delegation: Instant Booking on Airbnb

37 Pages Posted: 8 Aug 2022

See all articles by Nan Feng

Nan Feng

Tianjin University - College of Management and Economics

Yanan Shi

Tianjin University

Ben Choi

Nanyang Technological University

Zhijie Lin

Tsinghua University - School of Economics and Management

Yi Wu

Tianjin University - College of Management and Economics

Date Written: July 17, 2022

Abstract

A key transaction cost of online accommodation sharing is the need for manual screening by both hosts and guests. To improve market efficiency, Airbnb introduced an instant booking function that enables hosts to delegate the approval of reservations to the platform. Despite the convenience of instant booking, many hosts are hesitant to adopt it and continue to screen guests manually. Therefore, this study explores why and when Airbnb hosts delegate guest screening to the platform. Additionally, we examine the effects of instant booking adoption to understand the consequences of delegation. Using rich panel data from Airbnb, we draw on delegation theories to explore why and when hosts adopt instant booking. We further employ propensity score matching and difference-in-differences methods to examine the outcome of instant booking. Our findings indicate that hosts who have previously experienced high-quality guests are more likely to adopt instant booking. Furthermore, hosts with highly popular listings are less likely to adopt instant booking, especially those sharing their primary properties. The more popular the accommodation, the more hesitant hosts are to adopt instant booking. We also find that instant booking leads to more desirable guests and makes accommodations more popular. This study makes valuable contributions to the literature on accommodation-sharing operations management. These findings shed light on how operations managers of accommodation-sharing platforms can promote automated delegation. The results are also crucial to service providers interested in the benefits of platform delegations.

Keywords: accommodation sharing, instant book, delegation, guest quality, accommodation popularity

JEL Classification: M15,M31

Suggested Citation

Feng, Nan and Shi, Yanan and Choi, Ben and Lin, Zhijie and Wu, Yi, An Empirical Study of the Antecedents and Consequences of Delegation: Instant Booking on Airbnb (July 17, 2022). Available at SSRN: https://ssrn.com/abstract=4164849

Nan Feng

Tianjin University - College of Management and Economics ( email )

NO.92 Weijin Road
Nankai District
Tianjin, 300072
China

Yanan Shi

Tianjin University ( email )

92, Weijin Road
Nankai District
Tianjin, Tianjin 300072
China

Ben Choi

Nanyang Technological University ( email )

100 Nanyang Meadows
Singapore, 637819
Singapore
91092108 (Phone)
639798 (Fax)

Zhijie Lin

Tsinghua University - School of Economics and Management ( email )

Haidian District
Beijing, Beijing 100084
China

Yi Wu (Contact Author)

Tianjin University - College of Management and Economics ( email )

NO.92 Weijin Road
Nankai District
Tianjin, 300072
China

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