The exhaustion of the herding effect in peer-to-peer accommodation

Beatriz Benítez-Aurioles
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Beatriz Benítez-Aurioles: University of Málaga, Spain

Tourism Economics, 2022, vol. 28, issue 1, 27-43

Abstract: A significant reason for the concentration of demand in a subset of the supply in the peer-to-peer market for tourist accommodation is herding behavior, by which the decisions of the first guests are imitated by those who follow. This article proposes a profit- and utility-maximization microeconomic model and implements it with data of Airbnb listings corresponding to 10 European cities. Results show that the influence of each additional review is positive but decreasing, inducing a more balanced distribution of demand among offered accommodation and thus dampening the herding effect. Moreover, reservation policy—specifically, enabling the instant booking option—is a key to explain the initial push that accommodations need to be demanded now and, hence, to increase their possibilities of being demanded in the future.

Keywords: Airbnb; convergence; demand; herding behavior; reservation policy (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:28:y:2022:i:1:p:27-43

DOI: 10.1177/1354816620946537

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