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Do Incentives to Review Help the Market? Evidence from a Field Experiment on Airbnb

Author

Listed:
  • Andrey Fradkin

    (Questrom School of Business, Boston University, Boston, Massachusetts 02215)

  • David Holtz

    (Management of Organizations and Entrepreneurship and Innovation, Haas School of Business, University of California, Berkeley, California 94720; MIT Initiative on the Digital Economy, MIT Sloan School of Management, Cambridge, Massachusetts 02142)

Abstract

Many online reputation systems operate by asking volunteers to write reviews for free. As a result, a large share of buyers do not review, and those who do review are self-selected. This can cause the reputation system to miss important information about seller quality. We study the extent to which a platform can improve market outcomes by attempting to increase the amount and quality of information collected by its reputation system. We do so by analyzing a randomized experiment conducted by Airbnb. In the treatment, buyers were offered a coupon to review listings that had no prior reviews. In the control, buyers were not offered any incentive to review. We find that, although the treatment induced additional reviews that were more negative on average, these reviews did not affect the number of nights sold or total revenue. Furthermore, we find that, contrary to the treatment’s intended effect, Airbnb’s incentivized program caused transaction quality for treated sellers to fall. We examine how the quality of the induced reviews, market conditions, and the design of Airbnb’s reputation system can explain our findings.

Suggested Citation

  • Andrey Fradkin & David Holtz, 2023. "Do Incentives to Review Help the Market? Evidence from a Field Experiment on Airbnb," Marketing Science, INFORMS, vol. 42(5), pages 853-865, September.
    • Handle: RePEc:inm:ormksc:v:42:y:2023:i:5:p:853-865
    DOI: 10.1287/mksc.2023.1439
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    References listed on IDEAS

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