The Secret of Airbnb’s Pricing Algorithm

The sharing economy needs machine intelligence to set prices

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How much should you charge someone to live in your house? Or how much would you pay to live in someone else’s house? Would you pay more or less for a planned vacation or for a spur-of-the-moment getaway?

Answering these questions isn’t easy. And the struggle to do so, my colleagues and I discovered, was preventing potential rentals from getting listed on our site—Airbnb, the company that matches available rooms, apartments, and houses with people who want to book them.

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