Building Trust in Digital Platforms

Guest Chiara Farronato

Bio • Associate Professor of Business Administration at Harvard Business School • Researches platforms with a focus on information aggregation and redistribution • Studies the effects of platforms like Airbnb on cities and housing affordability

Summary This episode features Chiara Farronato, who discusses her journey into platform research, which began when she moved to California in 2009 and observed the rise of companies like Airbnb and Uber. Farronato defines platforms as information aggregators that collect fragmented information from various users, repackage it, and redistribute it to facilitate valuable exchanges. She emphasizes that while platforms offer significant benefits, such as flexible supply in the accommodations market, they also pose challenges like over-tourism and housing affordability issues. Farronato also touches on the regulatory approaches to big tech companies in the US and Europe, advocating for a balanced approach that avoids extremes of under or overregulation. She highlights the importance of transparency from platforms and the need for data to assess the net impact of these companies on society. She is developing a technology, a web browser extension, that can track consumer online behavior to gain more insight into how platforms operate.

Publications & Projects Mentioned • Farronato, C., & Fradkin, A. (2022). The welfare effects of peer entry: The case of Airbnb and the accommodation industry. American Economic Review, 112(6), 1782-1817 • Farronato, C., Fradkin, A., & MacKay, A. (2023). Self-preferencing at Amazon: Evidence from search rankings. AEA Papers and Proceedings, 113, 239-243. • Webmunk.org

Links Chiara's HBS profile