Racial Bias in the Sharing Economy and the Role of Trust

By Vilde Blomhoff Pedersen

2 September 2019 11:32

Racial Bias in the Sharing Economy and the Role of Trust

New working paper by Katrine Nødtvedt, Hallgeir Sjåstad (FAIR Insight Team), Siv Skard, Helge Thorbjørnsen and Jay Van Bavel: “Racial bias in the sharing economy and the role of trust”.

ABSTRACT

The rise of peer-to-peer platforms is one of the major economic and societal developments in the last decade. We investigated whether people engage in racial discrimination as consumers in the sharing economy. Using a set of carefully controlled experiments (N = 1,599), including a pre-registered study on a nationally representative sample, we find causal evidence for racial discrimination. When an identical Airbnb apartment is presented with a racial out-group (vs. in-group) host, people report more negative attitudes towards the apartment, lower intentions to rent it, and are 25% less likely to choose the apartment over a standard hotel room in an incentivized choice. However, racial discrimination disappears when the apartment is presented with an explicit trust cue, in the form of a visible top rating by other consumers (5/5 stars). This suggests that reputation-based information can counteract the tendency to discriminate against products and services provided by out-group members.

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