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What is the value of being a superhost ?

Author

Listed:
  • Aleksander Berentsen

    (Unibas - Université de Bâle = University of Basel = Basel Universität)

  • Mariana Rojas Breu

    (LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres)

  • Christopher Waller

    (Deakin University [Burwood])

Abstract

We construct a search model where sellers post prices and produce goods of unknown quality. A match reveals the quality of the seller. Buyers rate sellers based on quality. We show that unrated sellers charge a low price to attract buyers and that highly rated sellers post a high price and sell with a higher probability than unrated sellers. We fi nd that welfare is higher with a ratings system. Using data on Airbnb rentals, we show that Superhosts and hosts with high ratings: 1) charge higher prices, 2) have a higher occupancy rate and 3) higher revenue than average hosts.

Suggested Citation

  • Aleksander Berentsen & Mariana Rojas Breu & Christopher Waller, 2019. "What is the value of being a superhost ?," Working Papers hal-02305037, HAL.
    • Handle: RePEc:hal:wpaper:hal-02305037
    as

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    References listed on IDEAS

    as
    1. Allen Head & Alok Kumar, 2005. "Price Dispersion, Inflation, And Welfare," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(2), pages 533-572, May.
    2. Chiara Farronato & Andrey Fradkin, 2018. "The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb," NBER Working Papers 24361, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Ratings; Airbnb; Price Posting;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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