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Peer-to-Peer Markets

Author

Listed:
  • Liran Einav

    (Stanford University and NBER)

  • Chiara Farronato

    (Harvard Business School)

  • Jonathan Levin

    (Stanford University and NBER)

Abstract

Peer-to-peer markets such as eBay, Uber, and Airbnb allow small suppliers to compete with traditional providers of goods or services. We view the primary function of these markets as making it easy for buyers to find sellers and engage in convenient, trustworthy transactions. We discuss elements of market design that make this possible, including search and matching algorithms, pricing, and reputation systems. We then develop a simple model of how these markets enable entry by small or flexible suppliers, and the resulting impact on existing firms. Finally, we consider the regulation of peer-to-peer markets, and the economic arguments for different approaches to licensing and certification, data and employment regulation.

Suggested Citation

  • Liran Einav & Chiara Farronato & Jonathan Levin, "undated". "Peer-to-Peer Markets," Discussion Papers 15-029, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:15-029
    as

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    File URL: http://www-siepr.stanford.edu/repec/sip/15-029.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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