Title: Agglomeration among competitors: Evaluating the peer entry effect in sharing economy
Title:2021.5.26 14:00-16:30
Location:A622
Presenter:Prof. Ren Fei
Abstract
In the business dynamics of sharing economy, spatial agglomeration of individual providers is a striking feature, especially inhome-sharing business with numerous listings. Spatial agglomeration has the potential to agglomerate demand for individual listings, while it may intensify the localized competition as well. It is unclear how spatial agglomeration would affect listing performance, and how such effect varies with time and listing heterogeneity. We apply a natural experiment design to evaluate the peer entry effect on listing performances using a unique panel dataset from a leading home-sharing platform in China. Empirical results suggest that listing spatial agglomeration initially increases focal listing demand, but it intensifies localized competition over time, leading to a negative overall effect of spatial agglomeration on listing performance. We investigate potential mechanism of the peer entry effect with additional analysis. With regard to the listing heterogeneity, we find that focal listings in more developed areas receive larger agglomeration benefits, and listings that encounter peer entries with closer distances, more disparate descriptions, and higher quality confront larger localized competition. Our research contributes to both agglomeration economics and sharing economy literature by revealing the dynamics in home-sharing business. We also provide implications for listing operationsas well as platform management.
