publication . Preprint . 2015

The Tragedy of Your Upstairs Neighbors: Is the Airbnb Negative Externality Internalized?

Horton, John J.;
Open Access English
  • Published: 16 Dec 2015
A commonly expressed concern about the rise of the peer-to-peer rental market Airbnb is that hosts---those renting out their properties---impose costs on their unwitting neighbors. I consider the question of whether apartment building owners will, in a competitive rental market, set a building-specific Airbnb hosting policy that is socially efficient. I find that if tenants can sort across apartments based on the owners policy then the equilibrium fraction of buildings allowing Airbnb listing would be socially efficient.
free text keywords: Quantitative Finance - General Finance
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Malhotra, Arvind and Marshall Van Alstyne, “The Dark Side of the Sharing Economy . . . and How to Lighten It,” Commun. ACM, 2014, 57 (11), 24-27.

Zervas, Georgios, Davide Proserpio, and John Byers, “The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry,” Boston U. School of Management Research Paper, 2014, (2013-16).

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