Risk Perceptions of Airbnb Hosts

23 Pages·2017·4.82 MB·English

sustainability
Article
Risk Perceptions of Airbnb Hosts: Evidence from
a Mediterranean Island
NahidMalazizi1 ID,HabibAlipour1,*andHosseinOlya2 ID
1 Facultyoftourism,EasternMediterraneanUniversity,ViaMersin10,Famagusta99628,NorthCyprus,
Turkey;[email protected]
2 OxfordBrookesBusinessSchool,OxfordBrookesUniversity,OxfordOX30BP,UK;[email protected]
* Correspondence:[email protected];Tel.:[phone]
(cid:1)(cid:2)(cid:3)(cid:1)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:1)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)
Received:10April2018;Accepted:22April2018;Published:26April2018
Abstract: In the context of the sharing economy, Airbnb has become a formidable mode of
accommodation in the tourism industry worldwide, with a presence in over 34,000 cities in
191countries. However, the risks associated with online bookings are significant dimensions of
thise-marketdomain. ThisstudyassessesAirbnbhosts’perceivedrisksandinvestigatestheeffects
ofservice,financial,safetyandsecurity,psychologicalandpoliticalrisksonthehost’ssatisfactionand
intentiontocontinueandrecommendthisbusinesstopotentialhosts. Asurveywasadministeredto
221AirbnbhostslocatedinNorthernCyprus. Structuralequationmodeling(SEM)wasusedtotest
theproposedconceptualmodel. Theresultsrevealedthathostsatisfactionisnegativelyinfluenced
byfinancialandsafetyandsecurityrisks;continuanceintentionisnegativelyaffectedbyfinancial,
safetyandsecurity,andpoliticalrisks;intentiontorecommendthisbusinessisnegativelyaffectedby
politicalrisk;andpsychologicalriskincreasessatisfactionandintentiontocontinueandrecommend.
Byhighlightingthetheoreticalandmanagerialimplications,thisstudyinformsAirbnbmanagement
of the potential risks associated with this peer-to-peer (P2P) business in order to minimize the
associatedrisks,enhancehostsatisfactionandthequalityoftheirservices,andencouragehoststo
recommendAirbnbtotheirpeers.
Keywords: Airbnb;risk;host;sharingeconomy;psychologicalrisk;peer-to-peerbusiness
1. Introduction
The sharing economy, or collaborative consumption, is a peer-to-peer (P2P) marketplace for
gaining,givingandsharinggoods/servicesthroughtheinternetandithasgrownatanextraordinary
rate [1]. This so-called emerging economy has implications for empowering ordinary people,
improving efficiency and even lowering carbon footprints [2]. As a compelling part of the online
sharingeconomy,Airbnbandhasbecomeamajorcomponentofe-commerce,followingitsdramatic
growthinrecentyearstoreachavalueof$25.5billionin2015[3].
Several scholars have argued that the sharing economy is highly positive for sustainable
productionandconsumptionbecauseitoffersconsumerssignificantopportunitiestoexperienceand
learnaboutvariouscultural,economic,socialandenvironmentalissuesinthedestination,whichmight
notbepossiblewhenresidinginconventionalorall-inclusiveaccommodation[4–8].
Airbnbisaprominentplatformfortouriststolocateandbookvarioustypesofaccommodation
in various countries around the world. This new mode of seeking accommodation has become a
phenomenonthatcapturesasignificantspaceintheglobaltourismindustry[9,10]. Despiteserving
as a platform for sharing diverse properties and facilities, Airbnb’s anonymous transactions have
the potential to create diverse regulatory challenges [11]. Han et al. [12] (pp. 2–3) stated that,
“ThetransactionofP2Pisperceivedasamorecomplexprocessthanatraditionalonlinetransaction
Sustainability2018,10,1349;doi:10.3390/su10051349 www.mdpi.com/journal/sustainability
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becausethebuyer-peersandseller-peershardlyknoweachother.”Tussyadiah[13]alsoaddressed
theissuebyreferringtoanonymousinformationandcommunicationtechnologiesintourisminthe
contextofhostbranding. AstheAirbnbplatformfunctionsasamediatorbetweenhostandguest,
ithasnomechanismtoguaranteetheoutcome,makingtheissueof“trust”aconstantquestioninthe
mindsofserviceprovider—thehost. Möhlmann[5]assertedthat“overall,trust,costsaving,utility
andfamiliarityarealsofoundtobeimportantfactorsofsatisfactioninP2Paccommodation”[14],p.6.
McNamara [15] asserted that “despite or because of its number of global magnitude, Airbnb
disclaimsanyliabilityforuseofitsservices. Instead,Airbnbencouragesuserstobeawareoftheir
particularlocality’srules,zoningrestrictionsandtaxregulations,beforeplacingahomeorapartment
up for rent on Airbnb’s site” (p. 152). Nevertheless, the risk aspect is one of the most significant
issuesassociatedwithonlineapplicationsande-commerce[3,16]. Forinstance,researchersinvarious
onlinecommercialdomainshaveaddressedtheconceptofperceivedriskintroducedbyBauer[17]:
“Consumerbehaviorinvolvesriskinthesensethatanyactionofaconsumerwillproduceconsequences
which he cannot anticipate with anything approximating certainty and some of which are likely
to be unpleasant (p. 24).” The risks and perceived risk ideas have become standard parts of the
consumerbehaviorliterature.Bauer[17]employedtheconceptofperceivedrisktoexplainphenomena
such as purchase decisions. However, perceived risk has not been tackled through an in-depth
analysis. In disciplines such as psychology, economic game theory and statistical decision theory,
riskisassociatedwithchoosingbetweenpotentiallypositiveandnegativeoutcomes[18].
Most of the existing research on Airbnb focuses on guest attitude, satisfaction and intention
to purchase or repurchase, but little attention has been paid to concerns related to the host [19].
Additionally,thehospitalityandtourismliteratureonrisksnegativelyassociatedwithindividuals’
behaviorsassumesthatperceptionsofriskinAirbnbfromthesupplysidemighthavenegativeimpacts
ontheinteractionbetweenthehostandguestinthecontextofonlinetransactions.
GanapatiandReddick[20]statedthat“despiteitsgrowthinthelastdecade,theemergingsharing
economyisinafluxandfraughtwithrisks”(p. 80). Perceivedriskisanimportantissueintertwined
with online transaction platforms that has been considered by many researchers. For example,
Verhagenetal. [21] investigated perceived risk and trust associated with purchasing at electronic
marketplacesandErtetal.[22]revealedthatperceivedriskinthesharingeconomyisnotlimited
tothemonetaryaspect. Theystressedthat“themereactofsharingahomewithastrangercanbe
risky”(p. 63). Additionalrisksincludeareductioninthewholetravelexperienceandlife-threatening
situations.Therefore,mostresearchonthesharingeconomyhasemphasizedbuildingtrustonboththe
guestandhostsides[23]. Liangetal.[24]assertedthatsinceAirbnbisathird-partyplatformoffering
onlinematchingservicesforaccommodationbetweensellersandbuyers,riskmightbeanessential
influenceontheirbehaviorintention.Furthermore,inthecaseofAirbnb,hostandguestareconnecting
anddealingthroughanonlinesystem,whichisunlikeface-to-faceinteractions;thus,bothsidescan
promisemanythingsthatmightnotberealizedorthatendupinunexpectedexperiences[25,26].
Whilemanyscholarshaveexaminedguest-andhost-relatedissueswithintheAirbnbplatform,
studiesonriskandperceivedrisktothehostswithintheAirbnbplatformarescantandthosewho
havedealtwiththisissuefailtoprovideanin-depthanalysisoftheriskissue[27–35]. Recognizing
potentialrisksperceivedbytheAirbnbhostswillprovideAirbnbmanagementwithopportunities
to mitigate the problems, reduce and manage the perceived risks, facilitate the hosts’ preferences,
andencouragehoststoremainloyaltotheplatform. ThisstudythusrespondstoOlyaetal.’srecent
callforriskassessmentofAirbnbhosts’perceptions[19]. Airbnbhasnoticedthesignificanceofthe
riskinvolvedinthisP2Pbusiness[36].
Theassumptionisthattheperceptionofriskplaysaninfluentialroleintheeventualsatisfaction
and intention to reuse Airbnb accommodation services and in recommending the service to
others[37–40]. In their research of consumer online shopping and attitude behavior, Li and
Zhang [41] examined how consumer attitude toward online shopping led to their satisfaction for
theirdecision-makingandintentiontopurchaseonline. Therefore,thisstudyistimelyinaddressing
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thisaspectofAirbnbwithintheinternet-basedmarketbyevaluatingthehosts’perceptionofrisks,
whichwillhaveimplicationsforthehostsandpolicy-makers,leadingtowardaneventualsupport
systemforAirbnboperators. Thefindingsofthisstudywillcontributetoanunderstandingofthe
risksthataffectthehostsandtodevelopmentofapathwaytowardharmonizingsafeandsmooth
interactionsbetweenthetwoparties.
Withthecontinuousgrowthofinternationaltourismanditsdiversification,itislikelythatAirbnb
will experience further growth and expansion. Thus, there is an urgent need to investigate and
understandthevariousdimensionsofthisphenomenon,particularlyinrelationtotheaspectofrisk,
whichhassofarremainedunderstudied. Thisstudyaimstofillthisgap.
2. LiteratureReview
2.1. GuestPerspective
MostresearchexaminingAirbnbandrelatedissuesfocusesontheperspectiveandattitudeof
theguestandtheramificationsontheirintentiontorepurchase. Forinstance,Liang[42]assertedthat
whileperceivedrisknegativelyinfluencestheconsumer’sperceivedvalueandrepurchaseintention,
perceivedvaluepositivelyenhancestheconsumer’srepurchaseintention. Additionally,perceived
authenticity was found to have a significant effect on reducing Airbnb consumers’ perceived risk,
whichpositivelyinfluencestheirperceivedvalue.
MaoandLyo[43]investigatedtheeffectofpsychologicalfactorsonatraveler’smotivationto
reusetheAirbnbplatform,assertingthatsubjectivenormsandattitudesareimportantpredictorsfora
traveler’sintentiontorepurchase. Theauthorsreiteratedthatperceivedriskandperceivedvaluehave
adirectimpactonattitude,whichinfluencesrepurchaseintentionindirectly. Yeetal.[44]examined
theinfluenceofracesimilarityamongtheguestsandhostsontrustandintentiontouseAirbnb,and
Chen[45]foundthatonlinetrustisastrongdriverand/orbarriertopotentialcustomers’useintention.
Yang and Ahn [46] explored how perceived security and motivation in the sharing economy
affected attitude and loyalty toward Airbnb. Brochado, Troilo and Shah [47] examined travelers’
experiences of Airbnb and found that their culture and preference trends supported convergence
inthehospitalityindustry. Amaro,AndreuandHuang[48]conductedresearchongeneration“Y”
(TheMillennials—GenNext)andfoundahighintentionforbookingontheAirbnbplatform.
AccordingtoBrochadoetal.[47],thereisadebateamongcertainscholarsaboutconvergence
versus divergence. Some scholars argue that convergence manifests through technology because
itallowsconsumerstooptforstandardizedproductsthatfeaturedbothhighqualityandlowcost;
thus,a“higherincomewouldleadtoincreasedhomogenizationofconsumertastesandpreferences”
(p.210). Conversely,otherscholarsarguethattechnologyenablescustomizationatalowercostand
thatbecausecultureshapesthevarietiesofgoodsandservicescustomersdemand,a“higherincome
wouldleadtoheterogeneityofconsumerwantsasculturebecameaprimaryfactorinpurchasing
decisions”;thus,leadingtodivergence(p. 210). TheseviewshaveimplicationsforAirbnbhostsin
termsofcustomerexperiences. Borchadoandcolleagues[47]assertedthat“convergenceisobserved
in Airbnb themes across nations and cultures. Because, lodging they believe differs from food in
thelevelofriskassumed”(p. 210). Notwithstandingthedifferencesbetweentourists’culturesand
preferences,Borchadoandcolleagues[45]revealedthesimilaritiesintravelers’experiences. Similarly,
MitendorfandOysterman[49](p. 5827)assertedthat“forthesharingeconomy,weassumethattrust,
perceivedriskandsocialmotivesalsoinfluencetheproviders’intentions ... ourassumptionsare
especially truefor thehospitality industry, such ason Airbnb, as renting anaccommodation fora
predefinedtimeframeusuallyimpliesasharingdealbetweentwostrangers.”However,thisstudy
focuses on investigating the host’s behavior in relation to the risk they might perceive as Airbnb
listingmembers. Itisreasonabletojuxtapose“risk”and“trust”astwoconstructsthataffectthehost’s
behavior. Liangetal.elaboratedontheconflationofriskandtrust: “trustreferstoadispositionto
engageinsocialexchangesthatinvolveuncertainty,riskandvulnerability... thatarealsopotentially
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rewarding. Whilemostscholarsagreethattrustisapsychologicalstate,itcanbestudiedintermsof
itscognitiveoraffectiveaspects”(p. 42).
Manystudieshavealsoinvestigatedthemotivationfactorsasthemainantecedenttobooking
Airbnb accommodation. For example, Jung et al. [50] investigated distinctive traveler motivation
ofmonetaryornon-monetary-basedsharingservicesandfoundthat,whileAirbnbguestsfocuson
describingthefacilitiesandenvironmentalcircumstances, thehostconcentratesondescribingthe
externalcharacteristics[48]. Guttentag’sstudyattemptedtoanswerwhytravelerschooseAirbnbas
anaccommodationoptioninsteadofconventionalaccommodation[51].
According to Liang, Choi and Joppe [24], a distinction exists between experience-based and
transaction-basedsatisfaction,whiletrustisdividedintotrustinAirbnb(institutionbased)andtrustin
hosts(dispositiontotrust).MitendorfandOysterman[49]examinedhowsocialmotives,perceivedrisk
andtrustinbusinessorinprivatecustomersaltersthehost’sintentiontoacceptarequest. Phua[52]
reviewedusers’complaintsonAirbnbtoobtaininsightsintotravelers’perceptionsandfoundthat,
besidestechnologychallengesandcustomerservice,users’fadedtrustisoneofthemostimportant
complaintsagainsttheAirbnbplatform.
2.2. Host’sPerspective
Dalincar [53] showed that the host’s perceived risk often stems from the guest’s behavior,
asexpressedbyanAirbnbhostinthefollowingexample:
IdecidedtodeclineKevin’srequestbecauseIhadnoinformationthatwouldgivemeconfidence
that Kevin and his friends would treat our house with care and our neighbors with respect ...
unfortunately,Ihadbadexperienceswithlargegroupsofstudentsinthepast. Oncethepolicehad
tobecalledandtheneighborswereprettyupset. Ijustcannottaketheriskofthishappeningagain
(pp.195–196).
Other risks she mentioned include the risk of property damage; the risk to the evaluation of
anygivenfuturetransaction;theriskassessmenthostsmakewhengivingastrangerpermissionto
stayintheirhouse,unit,orroom;andtheriskofinjury,whichwillputthehostatariskofaliability.
Dolincar[53]hasreferredtoriskonthebothsupplyanddemandsides;however,shehasnotdealt
withtheissueofriskinasystematicoranalyticalway. Thus,thisstudyattemptstofillthisvoid.
In their hypothetical or scenario-based studies, Dolincar and colleagues [53,54] and
Hajubabaetal.[55]analyzedtheissueoftherisk-takinginemergencysituations. Thisstudyalso
respondstothecallbyDolincarandcolleagues[53,54],whosignifiedtheriskissueinthefollowing
statement: “question asking hosts about reasons for refusing permission to buy reveals trust and
insufficientinformationfromprospectiveguestsaskeydriversofrejectionmentionedby41%ofhosts,
pointingtohostsundertakingwhatiseffectivelyarisk-assessmentexerciseforeachbookinginquiry”
(p. 6). Gibbsetal.[56]focusedonpricingstrategyinrelationtodifferentvariablesforAirbnbina
studyofCanada. AfteracknowledgingthesignificantroleoftheAirbnbplatforminglobaltourism
with2,000,000listingsand60,000,000guests,theauthorsaddressedthepotentialriskassociatedwith
hostsonthisplatformandacknowledgedthat“morecasualsharingeconomyhostsneedtothink
carefullyabouttherisksandlaborsofhostingothersintheirproperty”(p. 54). Thisstudyanswersthe
authors’callforfuturestudiestoinvestigatetherisksinvolved. However,asresearchonAirbnbis
limitedandrelativelynew(mainly2014–2016),thisisthefirstcomprehensivestudytoinvestigatethe
riskstoAirbnbhosts[24].
A review of existing literature revealed many issues related to Airbnb hosts. For instance,
DealeandCrawford[27]investigatedtourists’motivationandhosts’behaviorandfoundthatrespect
betweentheownerandtouristsdevelopsameaningfulrelationshipandacquirestheessentialresources
tooperate. Hoshmand[28]claimedthathome-sharingposesvariousriskstoallinvolvedandthe
hostisnotsufficientlyprotectedbecauseofthelackofproperinsurance. Hostattributescanbuild
trustformakingdecisionsinthesharingeconomy[29]. LaminaandCheshire[30]assertedthatthe
financialprofitsofhostingnotonlymotivatethehosttoopentheirhometotouristsbutmightalso
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leadtosocialexchange. InhisresearchaboutAirbnb’hosts’experiences,attitudesandchallenges.
Tarek[31]addressedtheriskissueasaconstructworthyofcomprehensiveanalysisandKakaretal.[32]
conductedresearchontheinfluenceofthehost’sonlineinformation,suchasraceandgender,onprice
listing on the Airbnb platform. According to Xie and Mao [33], increasing the number of Airbnb
listings will influence the host’s performance quality, including trust. Ma et al. [34] found that
Airbnbhosts’profiledescriptionsarehighlyrelevanttotheirimageoftrustworthinessandTeubner’s
researchinvestigatedtheemergingwebofhost–guestconnectionsonAirbnb,takingasocialnetwork
perspectiveoftheimmediateimplicationsforthedesignandoperationofpeer-basedaccommodation
sharing[35].
Inexaminingthehost’smotivationforjoiningtheAirbnbplatform,LampinenandCheshire[30]
describedhowfinancialassuranceoftheAirbnbplatformleadstoreduceduncertaintyfortheguest
and the host, and thus balances intrinsic and extrinsic motivations [20]. Other studies examine the
legal issues surrounding the Airbnb platform. For example, Edelman and Geradin [57] found that
Airbnbmemberstendtohaveconcernsregardingitsregulatoryframework,whichrequirescertification,
insuranceandlicensing,andLee[58]explainedthatshort-termrentalsoflocalresidents’homestotourists
throughAirbnbinfluencedtherentalpriceandexacerbatedtheaffordablehousingcrisisinLosAngeles,
thushighlightingtheissueofhowmunicipalpolicymakerscanregulatetheAirbnbplatform.According
toLee,“solongasapropertyownerorleaseholdercanrentoutaroomonAirbnbforcheaperthan
thepriceofahotelroom,thereisanoverpoweringincentivetolisteachunitinabuildingonAirbnb
ratherthanrenttoLosAngelesresidents,therebycreating“cottagehotels”.Thisdecreasesthesupplyof
housingandspursdisplacement,gentrificationandsegregation”[58](p.230).
Woodson[59]assertedthatthedigitalagehasbroughtanewtypeofproductionandconsumption,
whichthusneedsanewtypeofregulation,andGear’sstudyproposedthatcurrenttrustandsafety
measuresonAirbnbarenotenoughtoprotecthostsfromrelevantlegalissuesinAirbnb[60].
ChengandFoley[61]gaveanexampleofdigitaldiscriminationwithintheAirbnbplatformthat
waspublicizedinmediainthecontextofanti-discriminationpoliciesinAirbnb,andMaese[62]claimed
thattheAirbnbplatformrequiresadifferentapproachtothatusedforconventionalaccommodation
whenattemptingtounderstandtherightsandobligationsofguestsandhosts. Utilizingfittheory
andtrusttransfer,Han,KooandChung[63]investigatedtheattributesofAirbnbhostsandtheirtrust
levelintheirgueststounderstandwhichhostcharacteristicsaffecttheguest’strustinthehostandin
Airbnbthroughtheguest’sperceivedfit. However,theyfailtoincludetherisk-associatedconstructs
onthehost’ssideoftheAirbnbplatform.
Mitendorf[64]investigatedtheconceptoftrustontheAirbnbplatformfromtheserviceproviders’
perspectives. However,Liangetal.[24]assertedthat“one’strustintheAirbnbplatformorcompany
shouldnotbeconfusedthiswithtrustinthehost(orthehost’strustintheguests),regardlessofwhether
the trust is cognitive or affective” (p. 42). This study, therefore, examines the disposition to trust
(hosttrustingtheguest)anditisinthiscontextthattheissueofriskishighlightedandinvestigated.
Although the issues of risk and safety in the online platform have been mentioned and
acknowledged,andAirbnbhostshavesufferedfromuncertaintyandencounteredriskycircumstances,
theissueofriskonthehostsidehasnotpreviouslybeeninvestigatedcomprehensively. Themajority
ofresearchinthesharingeconomyhasemphasizedtrustbuildingwithoutspecificfocusonhost[12].
NotwithstandingthesignificanceoftheriskissueintheAirbnbplatform,areviewofexistingliterature
highlightsthelackofsystematicanalysisandacademicresearchregardingthisaspect,especiallyin
relationtothehosts. Thisstudy,thus,attemptstoovercomethisgap.
2.3. PerceivedRiskine-Commerce
Theconceptofperceivedriskine-marketing,whichhasbeenutilizedtounderstandandexplain
consumerbehavior,comprisestwomaindimensions: uncertaintyandconsequences[65]. Accordingto
ParkandTussyadiah“riskiscomposedofthesizeofpotentialloss(orthesubjectivepossibilityofloss)
iftheresultsofanactwerenotfavorableandtheindividual’ssubjectivefeelingsofcertaintythatthe
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outcomewillbeunpleasant”[66](p. 655). Additionally,KoganandWallach[67]assertedthat,inthe
contextofuncertainty,riskisa“chance”thatcanalsobea“danger”ifithasanegativeoutcomes.
JacobyandKaplan[68]dividedtheperceivedrisksintosixcomponents: performance,financial,
time loss, social, physical and security/privacy. However, other authors defined perceived risk
differently to examine the impact of risk on consumer decision-making. For example, Peter and
Ryan[69]definedperceivedriskasakindofsubjectiveexpectedlossandFeathermanandPavlou[70]
definedperceivedriskasthepossiblelosswhenpursuingadesiredresult. Cunningham[65]noted
that“perceivedriskincludesthesizeofthepotentialloss(i.e.,thatwhichisatstake)iftheresultsof
theactwerenotfavorableandtheindividual’ssubjectivefeelingsofcertaintythattheresultswill
notbefavorable”[58](p. 131). Ourstudyappliesamulti-dimensionalconstructofrisktoinvestigate
whichriskfacetsarerelevanttoAirbnbhosts,basedonthehosts’perceptions.
Inthecontextoftourismanditsintangiblenatureoftransactionprocessesofservices,neither
thetouristsnortheserviceproviderareabletophysicallyexaminewhattheybuyandsell;therefore,
ahighdegreeofuncertaintypermeatestheprocess[71]. Nevertheless,literatureonperceivedriskto
datehasfocusedonconsumerbehaviorintheconventionalmarketingarena[65,72–75]. However,
thesurgeinonlineande-marketingande-commercehasledtoarefocusonthisrathernewmarketing
phenomenonwithanemphasisonthebuyersandsellers. Theconceptofriskhasresurfacedbecause
e-marketingismorepronetoriskanduncertainty,especiallyontheconsumer’sside[49,76–80]. Ina
comparisonoftheperceivedriskandbenefits,ParkandTussyadiah[66]identifiedthatriskoutweighs
theperceivedbenefitsofonlineactivitiesforbankingandshoppingandthatthenegativeeffectsof
perceivedriskarefoundinonlineinformationexchange,informationsearchandtransactionbehavior.
2.4. PerceivedRiskandPurchaseIntention
Previousstudieshaveconsideredriskandperceivedriskassignificantobstaclesinthecontext
of various online commercial domains, thus indicating that these two constructs are not only
influencers but also inhibitors to purchasing behavior [69,81]; risk and online purchasing and
repurchasing [82,83]; risk in an electronic marketplace [21]; risk and website purchasing [38,77];
risk and purchase in business to consumer (B2C) e-commerce [84]; risk and network loyalty [85];
riskandbuyingbehavior[86];andriskandcustomerloyalty[87]. Manystudieshavealsopointedout
thatintentiontopurchaseisnegativelyaffectedbyperceivedriskandsecurityriskthroughonline
shopping[88],whichsomescholarsbelieveismoreevidentinonlinetransactions,perceivedsecurity
andwebshopping[89];riskinelectroniccommerce[90];riskande-retailershopping[91];riskand
purchaseintention[92];riskande-commerceadoption[93,94];andrisk,onlineshoppingandwomens’
attitudes[95]. Forinstance,Chen[96]assertedthatperceivedrisknegativelyaffectsintentiontouse
mobilebankingservices.
Tourists are not immune to these risks when deciding to book online packages or in relation
toothertourism-relatedtransactionssuchasfuturetravelingbehavior[97], holidayproducts[98],
touristsatisfaction[99],travelintention[100],revisitintention[101],purchaseofonlinetickets[102]
andonlinetravelintentions[103]. Moreover,customersareusuallyconcernedaboutissuesofsecurity
andprivacywhenperformingonlinetransactions[104].
Nevertheless,themajorfocusofmostresearchisononlineconsumerbehaviorratherthanthe
service providers (e.g., the hosts) and researchers “mostly draw theories from classical consumer
behavior research, such as behavioral learning, personality research, information processing and
attitudemodels”(p. 194). Researchershavealsoappliedexpectation-confirmationtheory,innovation
diffusion theory, a technology acceptance model, the theory of planned behavior, the theory of
reasonedactionandinformationtheoryinordertoinvestigateonlineconsumerbehavior. However,
nocomprehensivestudycurrentlyexaminestheperceivedrisktoserviceproviders,suchasAirbnb
hosts,inanonlinedomain. Chanetal.[105]statedthat“trustandperceivedriskhavebeenwidely
investigatedinthestudyofconsumeronlinepurchaseintention.Somerecentstudiesfocusedprimarily
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on the trust formation process in the context of Internet shopping. In terms of product/service
characteristics,thekeyresearchtopicsareproducttypeandprice”(p. 202).
2.5. ComponentsofPerceivedRisk
Ingeneral,theimportanceofdifferenttypesofriskvariesamongdifferentindividualswhoare
encounteringthetransactioninaparticularcircumstancesuchasAirbnb;“socialmotives,trustand
perceived risk ... alter the accommodation provider’s intention to accept a booking request” [49]
(5827p.). Forinstance,ZikmundandScott[106]identifiedthatriskalsorelatestotheopportunitycost
ofthedecisioninthepurchasingprocess. Nevertheless,moststudiesfocusonsixtypesofperceived
riskinrelationtoonlinetransactions: financial,performance,physical,psychological,socialandtime
loss[68,85,106–108]. SeealsoTable1.
Perez, Mafe and Blas [86] revealed that perceived psychological, social and time-loss risks
significantly affect a user’s attitude toward social networking. Lu, Hsu and Hsu [109] proposed
that perceived risk is extended to a level where users feel uncertainty, which is detrimental to the
outcomes of applying for online services. Financial, product and information risk is regarded as
predominant in e-commerce and monetary loss is considered a crucial element of the electronic
market[91,92,110–112].
Astudyconductedonapparelproductsrevealedthatperceivedfinancial,productandtimerisk
negativelyinfluenceonlinepurchaseintention[113]. Intourism,atravelerencountersvarioustypes
ofrisk,includingfinancial,physical,healthandpsychologicalrisk,whicharetheresultofpolitical
instability,healthepidemics,terrorism,ornaturaldisastersinthedestinationcountry[99,114,115].
Table1.Typesofriskinmarketingliterature.
RiskFactorsintheCurrentStudy
Probabilityoflosingmoneyduetocurrencyfluctuationsandconcernsinvolvedinonline
transactions.Hostscanbesubjectedtopayafineifunawareoflaws/regulationsofthe
citiesinwhichtheyarelocated.Hostshavealsotakenissuewiththecompanyfor
Financialrisk damagesincurredduringatenant’sstayandmostinsurancecompaniestakeavague
stanceonthesetypesofexposures[116].Airbnb,whichisknownforitsshort-term
lodgingplatform,nowofferstofacilitateeventsandactivities(“Experiences”).However,
potentialrisksneedtobefullyvettedandconsidered[117].
Servicerisk:possibilityofmismatchingfacilitiesprovidedbythehostwithguest’s
expectations.Forinstance,ifhostshavesurveillancedevicesplacedintheirhomefor
securityreasons,theyhavetomakesurethatguestsareawarebymakingitveryclearin
thehousingdescription.Otherwise,theguestwillhavetherighttocancelthereservation
Functionalrisk
andaskfortherefundwhilethehostmighthavetodealwithpenalties.Authenticityofthe
accommodationinthecontextoftrustandreliabilityisexpectedfromthehosts.Hosts
mustensurethatallhabitationstandardsaremet(e.g.,referringtoelectricity,heat,running
waterandcleanliness).
Safetyandsecurityrisk:possibilityofdamagetotheproperty.Airbnbhostsalsoarefacing
Physicalrisk liabilityriskbecausemosthomeowner’sandrenter’sinsurancepoliciesdonotcover
regularcommercialactivityinthehome[118].
Host’sdislikeofcertaincountriesforpoliticalreasonsorguest’sconcernsaboutcriminal
andterroristactivitiesand/orriskofpotentialconflictwiththeguestbecauseofpolitical
reasons.Inthecontextofpoliticalrisk,theone-size-fits-allapproachisnotrecommended,
Politicalrisk
assharedaccommodationservicescanrangeinsafetydependingonlocation.Specific
locationsandtheirlocalriskaswellasage,gender,health,sexualpreference,ethnicityand
religionshouldallbetakenintoconsideration[119].
Theriskofpsychologicalstressstemmingfrombeingahost.Finley[120],notedthat“the
humanvulnerabilitytopsychologicalbiasesandemotional,irrationalbehavior;evenif
Psychologicalrisk
individualswerecalculating,rationalagentsexistinginadeterministicuniverse,
fullyassessingtheriskofeverytrustingdecisionwouldoftenbeinefficient”(p.12).
Sustainability2018,10,1349 8of23
3. Theory
ProspecttheorywasdevelopedbyKahnemanandTversky[121]toovercomethelimitationsof
utilitytheoryandanalyzedecision-makingunderrisk. Thesameauthorslaterdevelopedanadvanced
version focusing on the cumulative representation of uncertainty (Tversky and Kahneman [122]
Nevertheless,prospecttheoryiseffectiveforanalyzingsimpleprospectswithmonetaryoutcomes
andstatedprobabilitiesinwhichvalueisgiventogainsandlosses(i.e.,changesinwealthorwelfare)
andprobabilitiesarereplacedbydecisionweights. Therefore,people(e.g.,Airbnbhosts)overweight
outcomesconsideredcertain,relativetooutcomesthataremerelyprobable—asituationknownas
the certainty effect—and situations in which gains are replaced by losses represent the reflection
effect[121,122]. The reflection effect embodies the perceived risk by Airbnb hosts by violating
the certainty effect in the online community marketplace. Another aspect of prospect theory is
itsextensionfromrisktouncertainty[121,122]. Wakker[123]suggestedthatambiguityiswellsuited
to be embedded in prospect theory. Adding ambiguity to uncertainty strengthens the relevance
of prospect theory to the behavior of hosts and their perceived risk because ambiguity cannot be
underestimatedincombinationwithuncertainty. AccordingtoWakker,“existingevidencesuggests
thatambiguityattitudeforlossesdeviatemuchfromthoseforgains,withambiguityseekingrather
thanambiguityaversionprevailingforlosses[123],Hence,forthestudyofambiguity,thereference
dependenceofprospecttheoryishighlydesirable”(p. 342). Experimentsbasedonthecumulative
prospecttheory(CPT),“showthatchoiceunderuncertaintyexhibitssomeofthemaincharacteristics
observedinchoiceunderrisk”[122](p.316).Therefore,adegreeofuncertaintyinanonlinetransaction
indicatestheexistenceofadegreeofrisk. Furthermore,prospecttheoryovercomesthedeficienciesof
choicetheories,which“areatbestapproximateandincomplete... prospecttheorydepartsfromthe
traditionthatassumestherationalityofeconomicagents;itisproposedasdescriptive,notanormative,
theory”[122](p. 317). Onthisbasis,theAirbnbplatformisnotasimplerandleanerprocess,butrather
anuncertaindomainwherepartiesemployavarietyofprobingprocedures.
Giventhatonlinepurchasinginvolvesriskanduncertainty,onlinecustomersarenottypically
rational [124] because they tend to choose between probabilistic alternatives that involve risk,
even when the probabilities of the outcomes are known [121]. CPT [122] provides a rationale for
non-rationalbehaviorismwhich,inanadvanceinprospecttheory,hasbeenutilizedtoprovidean
effectiveframeworkandpowerfulexplanationthatallowsvariousweightingfunctionstogainandto
lose.CPT,whichleadsthebehavioralaccountofdecision-makingunderriskanduncertainty,combines
theattractivefeaturesofprospecttheoryandcumulativefunctionaldecisionsunderrisk[125]and
under uncertainty [126]. CPT employs cumulative functions rather than transforming separable
probabilities and extends prospect theory to include uncertain and risky prospects with different
outcomes. CPTalsoaddressesananalysisofdecisionsunderrisk,whichhasbeenacknowledgedasa
seminalparadigminbehavioraleconomics,andproposesthatpeoplethinkaboutpossibleoutcomes
accordingtocertainpointsofreferenceinsteadoffinaloutcomes[122].Schwarzetal.[127]investigated
CPTriskpreferencesandthemajorfeaturesofthistheory,includingthefollowing:
1. Diminishingsensitivity—peopleseekriskregardinglossandareriskaverseinrespecttogain.
2. Probabilityweighting—peoplefailtouseobjectiveprobabilitiestoassessoutcomes.
3. Lossaversioninvaluefunctions—lossloomsbiggerthangain.
Whenmakingadecision,peoplecomparethestatisticalfeaturesofperceivedriskandperceived
value[128],andriskaffectstheexpectedvaluethatmodulatesthesubjectiveassessmentofthedecision,
regardlessofwhetheritissatisfactoryornot.Whentheyevaluatevalueandrisk,consumers’behavioral
intentions are consequences of the decision-making process [82]. Since Airbnb is a platform with
threedimensions—thehost,theguestandtheAirbnbplatform—theriskissuesignificantlyinfluences
bothparties’behavioralintentionstorealizethetransactionandseethevalueoftheP2Peconomic
platform. Consequently,theinteractionbetweenriskandvalueseemstobeasignificantfactorfor
predicting satisfaction and continuance intention to use Airbnb platform. However, risk taking
Sustainability2018,10,1349 9of23
also varies as a function of the characteristics of the decision maker and the decision domain and
context [129]. When the context is online (i.e., the Airbnb platform), it becomes a domain-specific
situation. The question then is how the host, not the guest, processes the risks involved in this
particulartransaction. Thisisanunchartedterritory. IfweassumethatthehostintheAirbnbdomain
isunabletoprocessthecustomer’sinformationfully,thehostwillfacecertainrisks. Thisstudythus
aimstoexploretheserisksusingtheCPTapproachtoexplainhowgainsandlossesinvolvedinthe
Airbnbbusinessformulatethehost’sbehavioralresponses.
3.1. ConceptualModelandHypothesis
OglethorpeandMonroe[130]reiteratedthatperceivedriskincreasesasthelevelofuncertaintyor
thechanceofmorerelatednegativeoutcomesincreases.Furthermore,theintangibleessenceofservices
enhancesconsumers’perceivedrisk. Inonlinetransactions,ahighperceptionofriskistriggeredby
the consumer’s concern about the privacy and security of their purchases [131]. Perceived risk is
definedinvariousways,butitscomponentshaveconsistentlybeenexplainedasindividuals’beliefs
inprobablenegativeoutcomesthatwouldoccurthroughatransaction[110]. However,anAirbnb
hosthaslittlechanceofestimatingthelevelofriskofanonlinetransactionbecauseitisimpossible
to experience the actual situation until the guest arrives. In this sense, perceived risk is crucial to
sustainingtheprovisionofservicesthroughtheAirbnbplatform(i.e.,thehost). Existingliterature
on perceived risk has mostly investigated risk and perceived risk from the consumer’s or guest’s
viewpoint;therefore,toenrichtheacademicliterature,thisstudyexaminestheinfluenceofthetypes
ofperceivedriskwithintheAirbnbplatform,specificallythoserelatedtothehost.
One can argue that experiences of incidences of terrorism and suicide bombers, especially in
theWesterneconomies(wheremanyAirbnblodgingsarelocated),couldincreasethehost’sanxiety
abouttheirguestsbecausethereisnopriorface-to-faceencounter. HoodandNavaz[132]highlighted
thisaspectstatingthattheriskofwarandterrorismposedbyorganizationssuchasAl-Qaedaand
IslamicState(ISIS)isnolongerassociatedwithaspecificcountryorageographicarea,makingitlessa
country-specificriskandmoreapoliticalrisk. ThehotelassociationofNewYorkrecentlyannounced
that“weshouldworryaboutterroristsusingAirbnb”[133],especiallybecausethesuicidebomber
(SalmanAbedi)inManchesterstayedinashort-termrentalpriortoconductinghisactofterrorism.
Increasedanxietycanengenderadegreeofriskinthemindsofthehosts. DealeandCrawford[27]
confirmed that a web platform could create anxiety for both the host and the guest, especially on
the Airbnb platform. Additionally, the concept of trust, which is catalyst to risk minimization,
is“afrequentlyresearchedconceptinthesharingeconomyliterature”(p. 3).
Intermsofpoliticalrisk,HoodandNawaz[132]stated,“thereis,however,noclear,universally
accepteddefinitionofpoliticalrisk.... Thisobscurityisbeneficialasitpresentsascopetotailorthe
concept of political risk to include and attempt to mitigate, risks which may be specific to only a
particulareconomy,sectororafirm”(e.g.,Airbnb)(p. 7). Ourinsertionofpoliticalriskintothemodel
answersthecallbyBurmester,[134]whobelievedthat“noacademicdiscussionofpoliticalriskis
completewithoutacomplaintaboutthegeneralriskassociatedwithterrorism,crimeandcultural
differencesintheglobaltourismenvironmentthatpresentsathreatnotonlytotheguestbutalsoto
thehost”(p. 257).
XenophobiaisalsoachallengeintheAirbnbplatform. Edelman,LucaandSvirsky[135]found
evidenceofracismwhereinapplicationsfromguestswithAfricanAmericannameswere16%less
likely to be accepted than identical guests with distinctively white names. Airbnb recognized the
problemandissuedanewhostofguidelinesthatexplicitlylayoutnon-discriminatorypractices(p.84).
AccordingtoEdelmanetal.[136]“discriminationoccursamonglandlordsofallsizes,includingsmall
landlordssharingthepropertyandlargerlandlordswithmultipleproperties”.
TheproposedconceptualmodelshowninFigure1focusesonanAirbnbhost’sdecision-making
undervarioustypesofrisks. Themodelisdesignedtoexaminetheimpactoffivetypesofrisk(service
risk,psychologicalrisk,privacyrisk,safetyandsecurityriskandpoliticalrisk)tohosts’satisfaction,
Sustainability2018,10,1349 10of23
Sustainability 2018, 10, x FOR PEER REVIEW 10 of 22
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tmoeomthbeerrs .to others.
Continuance
Service risks H1b
intention to use
H1a
H1c
H2b
Financial risks
H2a H6a
H2c
H3b
Safety and
H3a Satisfaction
Security risks
H3c
H4b
H14a H6b
Psychological risks
H4c
H5b
H5a
Intention to
Political risks H5c recommend

Figure 1. Proposed conceptual model.
Figure1.Proposedconceptualmodel.
Based on the proposed conceptual model (Figure 1), the following hypothesis are posited:
Basedontheproposedconceptualmodel(Figure1),thefollowinghypothesisareposited:
Hypothesis 1a (H1a). Service risk has a negative relationship with the host’s satisfaction.
Hypothesis1a(H1a). Serviceriskhasanegativerelationshipwiththehost’ssatisfaction.
Hypothesis 1b (H1b). Service risk has a negative relationship with the host’s continuance intention to use.
Hypothesis1(H1b). Serviceriskhasanegativerelationshipwiththehost’scontinuanceintentiontouse.
Hypothesis 1c (H1c). Service risk has a negative relationship with the host’s intention to recommend.
Hypothesis1c(H1c). Serviceriskhasanegativerelationshipwiththehost’sintentiontorecommend.
Hypothesis 2a (H2a). Financial risk has a negative relationship with the host’s satisfaction.
Hypothesis2a(H2a). Financialriskhasanegativerelationshipwiththehost’ssatisfaction.
Hypothesis 2b (H2b). Financial risk has a negative relationship with the host’s continuance intention to use.
Hypothesis2b(H2b). Financialriskhasanegativerelationshipwiththehost’scontinuanceintentiontouse.
Hypothesis 2c (H2c). Financial risk has a negative relationship with the host’s intention to recommend.
Hypothesis2c(H2c). Financialriskhasanegativerelationshipwiththehost’sintentiontorecommend.
Hypothesis 3a (H3a). Safety and security risk has a negative relationship with the host’s satisfaction.
Hypothesis3a(H3a). Safetyandsecurityriskhasanegativerelationshipwiththehost’ssatisfaction.
Hypothesis 3b (H3b). Safety and security risk has a negative relationship with the host’s continuance
Hypothesis3b(H3b).Safetyandsecurityriskhasanegativerelationshipwiththehost’scontinuanceintention
intention to use.
touse.
Hypothesis 3c (H3c). Safety and security risk has a negative relationship with the host’s intention to
Hypothesis 3c (H3c). Safety and security risk has a negative relationship with the host’s intention
recommend.
torecommend.
Hypothesis 4a (H4a). Psychological risk has a negative relationship with the host’s satisfaction.
Hypothesis4a(H4a). Psychologicalriskhasanegativerelationshipwiththehost’ssatisfaction.
Hypothesis 4b (H4b). Psychological risk has a negative relationship with the host’s continuance intention to
use.