Social relationships as strategic variable in the sharing economy: an empirical analysis of accommodation-sharing market

Abstract

Accommodation services are perceived by consumers as possessing a greater purchase risk compared to goods, especially in first-purchase situations and during international travel. To mitigate this risk, consumer prospects look for cues that indicate the quality of service they can expect. This research investigates the role of social relationships in consumer purchase decision-making within rapidly growing accommodation sector of the sharing economy. Utilizing Airbnb’s social connection feature, consumers can see how they are socially connected with Airbnb hosts worldwide. We employ a censored proportional hazard model on a sample of 4,316 consumer prospects who have used social connection feature at least once. Additionally, we re-estimate the model using a propensity score matched sample of 8,632 consumers. The study reveals a positive association between the use of social connection feature and the hazard rate. Specifically, findings indicate that the using social connection feature for searching for accommodation reduces the time to make a first purchase. The article discusses the managerial implications of these findings.