What is the value of being a superhost?

Aleksander Berentsen, Mariana Rojas Breu (mrojasbreu@gmail.com) and Christopher Waller
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Mariana Rojas Breu: LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres
Christopher Waller: Deakin University [Burwood]
Authors registered in the RePEc Author Service: Mariana Rojas-Breu

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Abstract: We construct a search model where sellers post prices and produce goods of unknown quality. A match between a buyer and a seller reveals the quality of the seller.We look at the pricing decisions of the sellers in this environment. We then introduce a rating system whereby buyers reveal the seller's type by giving them a ‘star' ifthey are a high quality seller. We show that new sellers charge a low price to attractbuyers and if they receive a star they post a high price. Furthermore, high qualitysellers sell with a higher probability than new sellers. We show that welfare is higherwith a ratings system. Using data on Airbnb rentals to compare the pricing decisionsof Superhosts (elite rentals) to non-Superhosts we show that Superhosts: 1) chargehigher prices, 2) have a higher occupancy rate and 3) higher revenue than non-Superhosts.

Keywords: Price Posting; Airbnb; Ratings; superhosts (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-com and nep-dge
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Published in 68th Annual meeting of the French Economic Association, Jun 2019, Orléans, France

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Related works:
Working Paper: What is the Value of Being a Superhost? (2019)
Working Paper: What is the value of being a superhost? (2019)
Working Paper: What is the value of being a superhost ? (2019)
Working Paper: What is the value of being a superhost? (2019)
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