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Federal Reserve Bank of St. Louis
What is the Value of Being a Superhost?
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.
Cite this item
Aleksander Berentsen & Mariana Rojas Breu & Christopher J. Waller, What is the Value of Being a Superhost?, Federal Reserve Bank of St. Louis, Working Papers 2019-19, 01 Jul 2019.
- 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
Keywords: Ratings; Airbnb; Price Posting
This item with handle RePEc:fip:fedlwp:2019-019
is also listed on EconPapers
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