Digital discrimination in the sharing economy: what’s mine is not yours : evidence from an online experiment

Abstract

Although the issue of racial discrimination has been studied extensively throughout the past decades, its appearance in the disruptive digital market called the sharing economy is a rather unexplored field of research. To address this issue, we study how consumer outcomes in an Airbnbsetting are influenced by a host’s Arab (out-group) ethnicity compared to a Norwegian (in-group) ethnicity, and the underlying mechanisms and boundary conditions involved. Further, we examine the effect of introducing in-group characteristics (an in-group symbol) to the out-group host, to potentially eliminate discrimination. Conducting an online survey experiment, we find negative main effects of the Arab host’s ethnicity (vs. a Norwegian ethnicity) on some consumer outcomes. Yet, additional significant effects arise when accounting for individual differences in political orientation and intergroup threat. More specifically, being right-oriented (left-oriented) and perceiving Muslims as being of high (low) threat towards Western culture strengthens (reduces) out-group discrimination. Trustworthiness appears as the most important explanatory mechanism of the effects. In addition, the in-group symbol seems to eliminate discrimination in general, however not for all levels of political orientation and intergroup threat. The uncovering of racial discrimination on Airbnb has impactful consequences for decision makers in the sharing economy. As the issue of digital discrimination is likely to persist as we move into the future, it is crucial for such platforms to focus on how this can be minimized. A key challenge is to properly facilitate trust among all users, no matter their origin - to create communities where truly everyone can belong.