What is the value of being a superhost?

Aleksander Berentsen, Christopher Waller and Mariana Rojas-Breu

No 933, 2019 Meeting Papers from Society for Economic Dynamics

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' if they are a high quality seller. We show that new sellers charge a low price to attract buyers and if they receive a star they post a high price. Furthermore, high quality sellers sell with a higher probability than new sellers. We show that welfare is higher with a ratings system. Using data on Airbnb rentals to compare the pricing decisions of Superhosts (elite rentals) to non-Superhosts we show that Superhosts: 1) charge higher prices, 2) have more bookings and 3) higher revenue than non-Super hosts.

Date: 2019
New Economics Papers: this item is included in nep-dge, nep-mic and nep-pay
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Citations: View citations in EconPapers (1)

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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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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:933

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