As an Intermediary and an Employer: Two Roles and Two Problems for the Sharing Economy Platform
COM2 Level 4
Executive Classroom, COM2-04-02
Abstract:
Sharing economy platforms have radically revolutionized the modern economic landscape. As intermediaries, they broaden the scope of economic activities by facilitating the transactions between total strangers. As employers, they scale the economic activities by engaging a decentralized crowd of individual providers to supply assets and labor. Yet, performing these roles are not without difficulties. In this thesis proposal, we pinpoint two such difficulties, user bypassing and supply-side non-professionalism, with the former questioning the necessity of platforms as intermediaries and the latter challenging platform's ability as an employer. We then make an attempt to help platforms cope with these issues by (1) understanding user bypassing behavior in the sharing economy, and (2) proposing a complementary approach to managing provider quality in the sharing economy.
In the first study, we enquire into sharing economy providers' and consumers' motivations for bypassing the platform, and their behavioral strategies of overcoming trust barriers between each other. A qualitative case study on the accommodation sharing economy platform, Airbnb, is conducted. Our findings reveal that providers and consumers, i.e., hosts and guests in this context, are nudged by the reward and the legitimacy of bypassed transactions to jump out of the platform; in addition, they manage to build trust for bypassing and reduce risk in bypassing through various leveraging and internalizing strategies. Grounded in sharing economy, disintermediation, and embeddedness literature, this study uncovers the virtues and defects of the current sharing economy business model, details the actual behavioral strategies of disintermediation, augments the predominant economic view of disintermediation, and discovers a "spillover effect" of embedded relationship on economic action.
In the second study-in-progress, we propose that recognizing provider performance can improve provider quality in the sharing economy (through incentivizing their effort), which complements the performance disciplining approach currently adopted in practice. Drawing insights from sharing economy literature, employee recognition literature, and cognitive evaluation theory, we further suggest that criteria-based performance recognition is better than competition-based performance recognition to motivate sharing economy providers. To offer a proof-of-concept, we plan to leverage the unique design of Airbnb recognition program, "Airbnb Superhost Program", and employ a propensity score matching method to test whether criteria-based performance recognition has a positive impact on provider effort. Upon completion, this study will contribute an alternative regulation mechanism for the sharing economy platforms, extend employee recognition literature into distributed organizations, and direct attention to a frequently overlooked role of online reputation - a motivating device.
Overall, this thesis proposal is expected to make a major contribution to the literature of sharing economy business model, and provide constructive suggestions for practitioners to govern sharing economy platform's providers and consumers.