Dossier on collaborative economy (I): Platform economies and collaborative business, coordinated by Joan Torrent-SellensISSUE 14 (NOVEMBER 2020)

Pricing in peer-to-peer and two-sided digital marketplaces: Airbnb in Barcelona

Abstract

Digital platforms are changing the way in which suppliers and consumers of accommodation services interact, deeply transforming the tourism market. In these peer-to-peer and twosided digital marketplaces, pricing strategies become crucial for value generation, yet in contrast to conventional digital marketplaces, prices are set by non-professional vendors who are also consumers.


Airbnb is the most successful case of sharing economy-based accommodation rental, providing a vast and diverse range of places for tourists to stay in. In this digital marketplace, final consumers compete with professional hosts, looking for new business opportunities. Previous studies on pricing have not made a distinction between both groups. Our investigation aims to reduce this gap by focusing just on peer-to-peer transactions. We use a large dataset covering accommodation listed by non-professional hosts in Barcelona.


The paper offers evidence that higher accommodation prices are best explained by consumers’ preference for the intrinsic functional qualities of the value proposition. The systematic interaction of value and volume of online reviews and pricing strategies of close players can also produce a crucial impact on pricing.

Airbnb;  digital marketplaces;  consumer behaviour;  peer-to-peer;  pricing;