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What is the Value of Being a Superhost?

Author

Listed:
  • Berentsen, Aleksander

    () (University of Basel)

  • Breu, Mariana Rojas

    (University Paris Dauphine)

  • Waller, Christopher J.

    () (Federal Reserve Bank of St. Louis)

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

  • Berentsen, Aleksander & Breu, Mariana Rojas & Waller, Christopher J., 2019. "What is the Value of Being a Superhost?," Working Papers 2019-19, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2019-019
    DOI: 10.20955/wp.2019.019
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    More about this item

    Keywords

    Ratings; Airbnb; Price Posting;

    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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