The Role of Trust Indicators in a Digital Platform: A Differentiated Goods Approach in an Airbnb Market

Aliza Fleischer*, Eyal Ert, Ziv Bar-Nahum

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

We employed a differentiated goods market analysis where we utilized, in addition to the prevailing goods’ attributes, different types of the sellers’ attributes including trust indicators. We incorporated both sets of attributes into a structural model of the whole market including demand and pricing equations with the hotels as an outside good. Applying the model to Stockholm’s Airbnb market reveals that hosts’ attributes significantly affect market performance. Simulations of market scenarios show that the very high review scores and the Superhost certification help Airbnb compete with hotels and increase profitability. We also show that the “Airbnb plus” luxury program, which makes the apartments a closer substitute for hotels, leads to an increase in Airbnb’s market welfare. Our analysis provides a framework for understanding the full impact of the different attributes of the products, their providers, and their management in the sharing-economy accommodation market.

Original languageAmerican English
Pages (from-to)1173-1186
Number of pages14
JournalJournal of Travel Research
Volume61
Issue number5
DOIs
StatePublished - May 2022

Bibliographical note

Publisher Copyright:
© The Author(s) 2021.

Keywords

  • Airbnb
  • differentiated goods market
  • digital platform
  • online P2P markets
  • structural econometric model
  • trust

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