In whose bed shall I sleep tonight? The impact of transaction-specific versus partner-specific information on pricing on a sharing platform

Abstract

Platform providers in the sharing economy such as AirBnB face a trade-off between providing information on the object of the transaction and providing more information about the transaction partner. We view this trade-off from an economic perspective as the choice between complete or relational contracts. Using a global data set of AirBnB listings, we empirically compare the strength of influence of premises-specific versus host-specific information on pricing on that platform. The results indicate that partner-specific information in fact has only a comparatively weak influence on prices. This sheds critical light on the frequently used argument that in the sharing economy, personal information is essential to establish the necessary trust between transaction partners. We also find that the importance of premises-specific versus partner-specific information varies with the type of premises being rented.