Why are flexible booking policies priced negatively?

Why are flexible booking policies priced negatively? This work suggests a new direction to look at when explaining seemingly counterintuitive findings. Using data from 497,509 Airbnb listings in 44 cities of the world, we confirm a negative relationship in the peer-to-peer tourist accommodation market between flexible cancellation policies and nightly price, as well as between the possibility of instant booking and price. This phenomenon had been hypothesized to be caused by emotional factors that would go in the opposite direction to the monetary incentives. However, the economic analysis presented in this paper reinforces the idea that the functioning of these types of markets and, in particular, the vectors that determine supply are not very different from those that govern traditional markets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Tourism Management Elsevier

Why are flexible booking policies priced negatively?

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Publisher
Elsevier
Copyright
Copyright © 2018 Elsevier Ltd
ISSN
0261-5177
D.O.I.
10.1016/j.tourman.2018.02.008
Publisher site
See Article on Publisher Site

Abstract

This work suggests a new direction to look at when explaining seemingly counterintuitive findings. Using data from 497,509 Airbnb listings in 44 cities of the world, we confirm a negative relationship in the peer-to-peer tourist accommodation market between flexible cancellation policies and nightly price, as well as between the possibility of instant booking and price. This phenomenon had been hypothesized to be caused by emotional factors that would go in the opposite direction to the monetary incentives. However, the economic analysis presented in this paper reinforces the idea that the functioning of these types of markets and, in particular, the vectors that determine supply are not very different from those that govern traditional markets.

Journal

Tourism ManagementElsevier

Published: Aug 1, 2018

References

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