Collaborative Housing and the Intermediation of Moral Hazard

This paper considers intermediation in a di_erentiated short-term housing market where heterogeneous agents may stay at a hotel or at one of several private hosts' properties, below or above hotel quality. The collaborative-housing market fails when agents' hidden actions are noncontractable. If expected liability is not excessive, a trusted intermediary can induce agents to exert first-best effort and fully insure the hosts' risks, without subsidizing the transactions. The intermediary can also extract the hosts' surplus if their outside option is zero; somewhat counter-intuitively, the commission on either side of the transactions does not affect agents' equilibrium payoffs. The optimal commission structure makes direct transactions between hosts and renters unattractive.


Year:
2013
Publisher:
Lausanne, EPFL CDM MTEI
Keywords:
Laboratories:




 Record created 2013-12-16, last modified 2018-09-13


Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)