Julius Goedde

"Pricing in Markets without Money: Theory and Evidence from Home Exchanges" (Job market paper). Draft available upon request.

Abstract: I examine how peer-to-peer sharing platforms that use internal currencies instead of real money should set prices. Individuals must earn currency by supplying on the platform and can only spend it by consuming on the same platform. Beyond this difference, such systems often mimic real markets where prices equalize demand and supply. I argue that non-market-clearing prices can be superior. As individuals typically only have a limited demand for the specific goods on the platform, some may become satiated and reduce their supply. I illustrate with a stylized model of a dynamic exchange economy that reducing the price of attractive goods can increase their supply. In the empirical part, I focus on a widely used platform for exchanging holiday homes. Combining proprietary data on the universe of transactions with several quasi-experimental designs I confirm key predictions of the model. In particular, I demonstrate large income effects on supply and show that a reform that compressed prices increased the supply of over-demanded homes. Surprisingly, users whose price dropped do not exit at an increased rate, suggesting a strong preference against renting out for money. I also find little evidence of reduced effort and misallocation. Thus, compressed prices may indeed improve upon market-clearing prices. A broader insight is that lessons from traditional markets may not easily extend to markets without real money.

"Building trust in markets: Evidence from home exchanges" (with Gabrielle Fack and Liam Wren-Lewis)

"Welfare and inequality in internal currency systems with endogenous supply" (with Sam Altmann and Liam Wren-Lewis)

"Two-sided markets in the presence of switches" (with Xavier Lambin and Jérôme Pouyet)