Transparency of Add-On Fees on Peer-to-Peer Platforms: Evidence from Airbnb

Kevin Ducbao Tran, Leonardo Madio, Michelangelo Rossi and Mark J. Tremblay

No 11574, CESifo Working Paper Series from CESifo

Abstract: This paper investigates the impact of price transparency on equilibrium prices and fees by considering a policy change implemented by Airbnb that affected the transparency of cleaning fees for IP addresses from the European Union (EU). Using a difference-in-differences approach, we find a reduction in cleaning fees of 2-4%. Consistent with our theoretical framework, we also find that listings without a cleaning fee, something that is common on Airbnb, appear more affordable after the policy change and react by increasing their nightly price by 5-6%. We argue that this result is driven by some hosts learning about the full prices of their rivals due to the transparency policy, finding themselves more affordable. This analysis uncovers a new mechanism through which greater price transparency can lead to price increases.

Keywords: price transparency; obfuscation; cleaning fees (search for similar items in EconPapers)
JEL-codes: D40 D80 L10 L20 L40 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11574

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