Platform as a Rule Maker: Evidence from Airbnb’s Cancellation Policies
Stuart School of Business research presentation by: Professor of Economics Liad Wagman and Jian Jia (Stuart Ph.D. Management Science ’20), Economist, Amazon
Platform as a Rule Maker: Evidence from Airbnb’s Cancellation Policies
- Professor of Economics Liad Wagman
- Jian Jia (Stuart Ph.D. Management Science ’20), Economist, Amazon
Abstract:
Digital platforms are match-making intermediaries and establish internal rules that govern all users in their ecosystems. To better understand the governing role of platforms, we study two Airbnb pro-guest rules that pertain to guest and host cancellations, using data on Airbnb and VRBO listings in 10 United States cities. We demonstrate that such pro-guest rules can drive demand and supply to and from the platform as a function of the local platform competition between Airbnb and VRBO. Our results suggest that platform competition sometimes dampens a platform-wide, pro-guest rule and sometimes reinforces it, often with heterogeneous effects on different hosts. This implies that platform competition does not necessarily mitigate a platform’s incentive to treat the two sides asymmetrically, and any public policy in platform competition must consider its implication on all sides.
All Ï㽶´«Ã½ faculty, students, and staff are invited to attend.
The Friday Research Presentations series showcases ongoing academic research projects conducted by Stuart School of Business faculty and students and guest presentations by Ï㽶´«Ã½ colleagues, business professionals, and faculty from other leading business schools.