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

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  • Beatriz Benítez-Aurioles

    (University of Málaga, Spain)

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.

Suggested Citation

  • Beatriz Benítez-Aurioles, 2022. "The exhaustion of the herding effect in peer-to-peer accommodation," Tourism Economics, , vol. 28(1), pages 27-43, February.
    • Handle: RePEc:sae:toueco:v:28:y:2022:i:1:p:27-43
    DOI: 10.1177/1354816620946537
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    References listed on IDEAS

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