Mis-regulation occurs when regulation does not fix the problem it was enacted to solve. This article first looks at what sort of issues regulation is capable of fixing. After that, a regulatory framework is provided that urges policymakers to only enact regulation that provides the greatest net benefit for all involved. In the case of Airbnb, two-way reputational mechanisms — the ability to rate the other party, usually through a public “five-star” rating system — has solved most of the problems regulation is capable of curing. Then, the article analyzes the current anti-Airbnb laws in New York City and San Francisco, and argues they are not providing a greater net benefit for anyone but the incumbent hotel industry. In conclusion, policymakers should not pass any new anti-Airbnb regulation until it can create a greater net benefit than what exists now.
The New Blame Game: How Airbnb Has Been Mis-regulated as the Scapegoat for Century-Old Problems,
Bus. Entrepreneurship & Tax L. Rev.
Available at: https://scholarship.law.missouri.edu/betr/vol2/iss1/7