Evidence from surveys and lab experiments suggests that people’s propensity to conform to the opinion of others is lower in more individualistic cultures. Do these findings hold in real-world settings? This paper quantifies the role of culture as a determinant of social influence in the context of online consumer reviews. Exploring discontinuities in the way Tripadvisor displays average ratings, I estimate how reviewers from different countries respond to the average opinion of past consumers. A discontinuous increase of 0.5 stars in a restaurant’s average rating leads reviewers from countries with the least individualistic cultures to report ratings that are 0.1 stars higher. The size of the effect reduces in individualism and becomes statistically insignificant for consumers from the most individualistic cultures. The negative relationship between individualism and reviewers’ tendency to conform cannot be explained by country-level predictors of individualism, such as income or religion. Moreover, cross-regional variation within Italy reveals that the correlation between cultural values and social influence also holds across reviewers from different regions within the same country. These findings imply that average ratings converge faster to firms’ real quality when reviewers are from more individualistic cultures.

This paper studies the impacts of a specific regulation restricting short-term rental activity, the Home-Sharing Ordinance, adopted in the city of Santa Monica in May 2015. It mainly focuses on carefully estimating how the ordinance has affected the number of housing units operating on Airbnb’s platform. Using a dataset of Airbnb listings in the area surrounding the city of Los Angeles, I find that the ordinance has reduced the number of entire homes listed on Airbnb in Santa Monica by approximately 61%. I also study the impacts of this regulation on the long-term rental market and find no evidence of a significant effect of the ordinance on residential rents in Santa Monica. Finally, I provide suggestive evidence of how the policy under study has affected housing reallocation in the city.

This article studies the impacts of online reviews on firm dynamics and consumer welfare in the context of the restaurant industry. Preliminary evidence suggests that restaurants that get reviews early are likely to survive, while entrants with few reviews exit early. To explore a potential explanation, I build a model featuring firms of heterogeneous quality facing static pricing decisions and dynamic entry and exit choices. Imperfectly informed consumers are modeled under the rational inattention framework. They use aggregate information provided by online reviews to form priors regarding quality but can also process additional information at a cost. If the cost to process information is high enough, young firms have to operate at very low profits even if they have high quality. The model highlights that the overall impact of online review websites depends on their effect on consumers’ prior beliefs and on the cost of obtaining information from other sources.

This paper empirically studies the impacts of short-term rental and home-sharing activities on neighborhood-level outcomes. It focuses on the city of Madrid and builds a comprehensive dataset of Airbnb activity and core neighborhood attributes (house prices, consumption amenities, and jobs) to argue that the increasing presence of touristic apartments affects each one of these core neighborhood attributes. I find that Airbnb activity increases house prices, consumption amenities that are highly demanded by tourists (restaurants), and low-wage jobs. In addition, I use data on cross-neighborhood mobility patterns to show that, directly and indirectly by its effect on house prices, Airbnb activity reduces population density by preventing some of the in-migration of would-be new neighborhood residents.