Platform Competition in the German Home Sharing Economy: An Investigation About the Importance of Network Effects on Single- and Multi-homing Users

Abstract

Whilst numerous researchers have explored the field of platform competition and network effects, this dissertation examines whether or not single- and multi-homing users of online platforms attribute varying levels of importance to direct and indirect network effects respectively. Specifically, this dissertation focuses on the German home sharing market and the users of online home sharing platforms, i.e. those renting a room on an online platform, e.g. AirBnB. The research was conducted with the help of a survey in the German market. The analysis focuses on the importance of direct and indirect network effects for single-homing, i.e. users who just use one platform, and multi-homing users, i.e. users who use more than one platform to book a room on a home-sharing platform. The first part of the analysis concludes that direct network effects are more important for single-homing users than for multi-homing users when using a two-sided platform. The findings of the second part of the analysis show that indirect network effects are more important for multi- than for single-homing users when using a two-sided platform. The above findings imply that said platforms should on the one hand increase focus on building on direct network effects in order to keep single-homing users on the platform, and on the other hand, foster the relationship with marquee users in order to strengthen the indirect network effects and attract more multi-homing users. Lastly, the findings offer important insights to platform owners that could support their competitiveness versus other platforms in the home-sharing market.