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The New Age of Collusion? An Empirical Study into Airbnb's Pricing Dynamics and Market Behavior

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  • Richeng Piao

Abstract

This study investigates the implications of algorithmic pricing in digital marketplaces, focusing on Airbnb's pricing dynamics. With the advent of Airbnb's new pricing tool, this research explores how digital tools influence hosts' pricing strategies, potentially leading to market dynamics that straddle the line between efficiency and collusion. Utilizing a Regression Discontinuity Design (RDD) and Propensity Score Matching (PSM), the study examines the causal effects of the pricing tool on pricing behavior among hosts with different operational strategies. The findings aim to provide insights into the evolving landscape of digital economies, examining the balance between competitive market practices and the risk of tacit collusion facilitated by algorithmic pricing. This study contributes to the discourse on digital market regulation, offering a nuanced understanding of the implications of AI-driven tools in market dynamics and antitrust analysis.

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  • Richeng Piao, 2023. "The New Age of Collusion? An Empirical Study into Airbnb's Pricing Dynamics and Market Behavior," Papers 2312.05633, arXiv.org.
    • Handle: RePEc:arx:papers:2312.05633
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    File URL: http://arxiv.org/pdf/2312.05633
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