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  • 2016
  • Article
  • Annual Review of Economics

Peer-to-Peer Markets

By: Liran Einav, Chiara Farronato and Jonathan Levin
  • Format:Print
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Abstract

Peer-to-peer markets such as eBay, Uber, and Airbnb allow small suppliers to compete with traditional providers of goods or services. We view the primary function of these markets as making it easy for buyers to find sellers and engage in convenient, trustworthy transactions. We discuss elements of market design that make this possible, including search and matching algorithms, pricing, and reputation systems. We then develop a simple model of how these markets enable entry by small or flexible suppliers, and the resulting impact on existing firms. Finally, we consider the regulation of peer-to-peer markets, and the economic arguments for different approaches to licensing and certification, data and employment regulation.

Keywords

Peer-to-peer; Online Platforms; Matching; Innovation; Digital Platforms; Marketplace Matching; Market Design; Internet and the Web; Technology Adoption; Network Effects; Market Entry and Exit

Citation

Einav, Liran, Chiara Farronato, and Jonathan Levin. "Peer-to-Peer Markets." Annual Review of Economics 8 (2016): 615–635.
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About The Author

Chiara Farronato

Technology and Operations Management
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More from the Authors

    • 2022
    • Faculty Research

    Consumer Demand with Social Influences: Evidence from an E-Commerce Platform

    By: El Hadi Caoui, Chiara Farronato, John J. Horton and Robert Schultz
    • June 2022
    • American Economic Review

    The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb and the Accommodation Industry

    By: Chiara Farronato and Andrey Fradkin
    • March 2022
    • Faculty Research

    Telepass: From Tolling to Mobility Platform

    By: Chiara Farronato
More from the Authors
  • Consumer Demand with Social Influences: Evidence from an E-Commerce Platform By: El Hadi Caoui, Chiara Farronato, John J. Horton and Robert Schultz
  • The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb and the Accommodation Industry By: Chiara Farronato and Andrey Fradkin
  • Telepass: From Tolling to Mobility Platform By: Chiara Farronato
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