Abstract
A significant reason for the concentration of demand in a subset of the supply in the peer-to-peer market for tourist accommodation is herding behavior, by which the decisions of the first guests are imitated by those who follow. This article proposes a profit- and utility-maximization microeconomic model and implements it with data of Airbnb listings corresponding to 10 European cities. Results show that the influence of each additional review is positive but decreasing, inducing a more balanced distribution of demand among offered accommodation and thus dampening the herding effect. Moreover, reservation policy—specifically, enabling the instant booking option—is a key to explain the initial push that accommodations need to be demanded now and, hence, to increase their possibilities of being demanded in the future.
Get full access to this article
View all access options for this article.
