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Platform, Anonymity, and Illegal Actors: Evidence of Whac-A-Mole Enforcement from Airbnb

Author

Listed:
  • Jian Jia

    () (Stuart School of Business, Illinois Institute of Technology, 565 W Adams, 4th Flr, Chicago, IL 60661)

  • Liad Wagman

    () (Stuart School of Business, Illinois Institute of Technology, 565 W Adams, Suite 412, Chicago, IL 60661)

Abstract

Airbnb, a prominent sharing-economy platform, offers dwellings for short-term rent. Despite restrictions, some sellers illegally offer their accommodations, taking advantage of a degree of anonymity proffered by the platform to hide from potential enforcement. We study the extent to which enforcement works in Manhattan, one of the most active short-term rental markets, by testing the effects of two recent enforcement events. We demonstrate that prices of entire-home listings in Manhattan increase and vacancies decrease following each enforcement event, suggesting that illegal entire-home listings are being withdrawn from the market, with these effects varying depending on neighborhood characteristics. We further demonstrate that a significant portion of withdrawn listings re-enter the market under the less-enforced listing category of private rooms.

Suggested Citation

  • Jian Jia & Liad Wagman, 2018. "Platform, Anonymity, and Illegal Actors: Evidence of Whac-A-Mole Enforcement from Airbnb," Working Papers 18-01, NET Institute.
  • Handle: RePEc:net:wpaper:1801
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    References listed on IDEAS

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    More about this item

    Keywords

    enforcement; anonymity; short-term rentals; platform; illegal supply;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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