The core insight: transparency changes how hosts (not just guests) look at prices. When rivals’ total prices are clearer, hosts adjust their strategies. This is especially impactful in peer-to-peer platforms where pricing frictions exist and some hosts and guests might be naive or have search costs.

Airbnb hosts set nightly prices and cleaning fees. Before 2019, EU guests only saw cleaning fees at checkout. After a regulatory push, Airbnb made these fees visible upfront. Using a difference-in-differences approach, we studied the impact on prices and fees.

How does price transparency affect a market?🤔

In our new paper, Kevin Tran, @leonardomadio.bsky.social, Mark J. Tremblay, and I analyze Airbnb’s policy change in the EU, where cleaning fees became fully transparent. The surprising finding: transparency doesn’t lead to lower prices. Here’s why:

🎞️ A notable case of this bias? The French movie "The Unknown Girl", selected for the Palme d’Or Cannes in 2016, is rated 6.5 on IMDb. That’s relatively low… but is it due to the fact that most of the raters were experienced, stringent users? (10/15)

How about ratings' differences between experienced and novice users? This is where it gets interesting. Experience users rate virtually ALL movies more harshly, independent of genre, year, quality, actors, director, and more. (3/15)

Have a look at this example: everyone agrees product A is better… and yet product B gets better ratings. Do we also see this in real-world data? (1/15)

🧵 Excited to share that our paper, "The Good, The Bad, and The Picky: Consumer Heterogeneity and the Reversal of Product Ratings" (joint with Tommaso Bondi and Ryan Stevens), is forthcoming at Management Science!