Sharing Economy - Asymmetric effects between host and Airbnb in case of a service failure

With the enormous proliferation of shared economy offers on platforms such as Airbnb, also the number of service failures are increasing. In contrast to classic hotel businesses, two parties (host or platform) could be responsible for the failure. While these failures threaten the platforms’ success, little is known about consumers’ reactions and appropriate recovery strategies. Based on attribution theory, our study shows that the locus and controllability of the failures influence consumer’s attribution of responsibility and their expression of anger. In particular, anger in host-located failures was found to spillover to Airbnb, which has managerial impacts. Moreover, to recover consumers’ satisfaction and decrease anger, an assistance (monetary) recovery strategy was more (less) effective.