Racial Bias in the Sharing Economy and the Role of Trust

Abstract

The rise of peer-to-peer platforms has represented one of the major economic and societal developments observed in the last decade. We investigated whether people engage in racial discrimination in the sharing economy, and how such discrimination might be explained and mitigated. 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. Reduced self-congruence with apartments owned by out-group hosts mediates these effects. Left-leaning liberals rated the out-group host as more trustworthy than the in-group host in non-committing judgments and hypothetical choice, but showed the same in-group preference as right-leaning conservatives when making a real choice. Thus, people may overstate their moral and political aspirations when doing so is cost-free. However, even in incentivized choice, racial discrimination disappeared when the apartment was presented with an explicit trust cue, as a visible top-rating by other consumers (5/5 stars).