The next working group meeting on Digital Activities will take place on Tuesday, 8th April from 5.30pm to 7pm
Speaker : Chiara Belletti - Paris Dauphine-PSL University
Papier : Rating Systems and the End-Game Effect: When Reputation Works and When it Doesn't
Abstract : Do rating systems provide incentives to sellers when they are about to exit a market? Using data from Airbnb, this paper examines how end-of-game considerations affect hosts’ effort decisions. We take advantage of a regulation on short-term rentals in the City of Los Angeles to identify hosts who anticipated their imminent exit from the platform due to non-compliance with new eligibility rules. We focus on hosts who left the platform as a result of the regulation and measure their effort with listing’s ratings in effort-related categories such as check-in, communication and cleanliness. With a Difference-in-Differences and Event Study approach, we compare how listing’s effort-related ratings changed, compared to ratings on location, after the regulation announcement and during its implementation. We document a statistically significant decrease in effort in the last periods of the hosts’ career. Our findings provide insights for platform managers, highlighting the adverse effects of end-of-game considerations on how rating systems affect sellers’ incentives for the provision of high-quality services.
Relevant information:
- Here the Microsoft Teams link. The session will cover 90 minutes (questions and answers included).
- The working group is part of the activities of the Governance and Regulation Chair at Paris Dauphine-PSL University. The group meets once in two weeks to discuss, share, and present working papers and/or ideas surrounding recent developments in the domain of platform regulation. We have both internal and external presenters to share their work.
- If you would like to present your work or have anyone in mind to present, please send an email to lucas.eustache@dauphine.psl.eu.
