Strategic Downward Selection: Evidence from a Peer-to-peer Platform Market

Yanhua Bird, PhD Candidate in the Organizational Behavior Unit, Harvard Business School and Harvard Sociology

Contrary to the general view that market participants seek exchange partners with superior or at least similar market standing, this article posits that in some markets in which one’s success depends almost entirely on exchange partners’ post-hoc evaluations, they may seek partners with inferior standing driven by evaluation anxiety. I test this idea using both quantitative and qualitative data on a peer-topeer lodging platform market.