Nadim

Innovation in a Digital World

Group J1-D:

David Harlley, Federico Selle, Gabriela Carvalho,

Nadim Soliman, Roberto Liaño, Saloni Vyas

AIRBNB CASE

1) Airbnb is part of the new sharing economy, what are the benefits and risks of this new economy?

The benefits of a sharing economy could be divided into four categories. Firstly, a sharing economy facilitates communication between customers and service/product providers, making it easier for customers to obtain the necessary information to make better decisions. Moreover, a more transparent communication also increases trust between the customers and providers, which decreases the service/product provider´s risk, as compared to conventional markets where providers are often offering services to an unknown individual. For example, Airbnb enables the customer to ask the host questions relating to his or her specific needs for an apartment. Not only does this allow the customer to better understand if the apartment is a good match to his needs, but the host can also get to know the customer and decide if he would accept him in his house or not. In the end, both players are able to make more informed decisions in a more efficient manner.

On a similar note, a sharing economy facilitates the interaction process in a specific market which may result in economic benefits for the users. Service/product providers communicate their offers in one single platform, reaching various customers at the same time and, hence, diminishing “marketing” costs. Customers are able to compare options, filter offers by specific characteristics, search offers in a more organized fashion and diminish their own searching costs. These characteristics also allow for more competitive prices and prices more proportionate to the quality of the service/product offered. Furthermore, interacting within these markets allows users to obtain economic benefits (or avoid costs) since they are able to, for example, rent a product they would...