Business Case Studies & Business Publications

Building Trust at Scale: Airbnb’s Fight ...

Sun, Bo

Case

Building Trust at Scale: Airbnb’s Fight Against Adverse Selection

Sun, Bo

GEM-0237 | Published March 25, 2025 | 5 pages Case

Collection: Darden School of Business

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This case begins in the middle of a crisis for Airbnb, Inc. (Airbnb): A host has returned home to find her apartment ransacked by Airbnb guests, putting the company’s reputation—and its core business model, which is based on trust between hosts and guests—at stake. CEO Brian Chesky must decide on a strategy for both managing the immediate crisis and enabling Airbnb to build and maintain trust in a rapidly scaling marketplace. The case introduces the concept of adverse selection and market-design strategies from economics research and is well suited for courses on managing uncertainty, particularly when the courses discuss how to build and scale two-sided marketplaces.

Practice identifying and analyzing adverse selection problems; learn and practice solutions to adverse selection, using research on mechanism design; and learn to evaluate the trade-offs involved in implementing mechanisms.