What drives pricing behavior in Peer-to-Peer markets? Evidence from the carsharing platform blablacar

Abstract : We examine how price and demand are determined on peer-to-peer platforms and whether experience and reputation have the same impact as in traditional markets. We use data from the world's leading intercity carsharing platform, BlaBlaCar, which connects drivers with empty seats to riders. We find that pricing decisions evolve as drivers gain experience with the platform. More-experienced drivers set lower prices and, controlling for price, sell more seats. Our interpretation is that more-experienced drivers on BlaBlaCar learn to lower their prices as they gain experience; accordingly, more-experienced drivers earn more revenue per trip. In total, our results suggest that peer-to-peer markets such as BlaBlaCar share some characteristics with other types of peer-to-peer markets such as eBay but remain a unique and rich setting in which there are many new insights to be gained.
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Submitted on : Friday, February 8, 2019 - 2:29:33 PM
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Mehdi Farajallah, Robert Hammond, Thierry Pénard. What drives pricing behavior in Peer-to-Peer markets? Evidence from the carsharing platform blablacar. Information Economics and Policy, Elsevier, In press, ⟨10.1016/j.infoecopol.2019.01.002⟩. ⟨halshs-02012097⟩

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