Biased Reputations: Using Cross-Listed Properties to Identify the Negative Effects of Perceived Race on Users’ Reputations on Airbnb

We investigate whether users’ reputations on Airbnb are racially biased. We do so by comparing the ratings of vacation rentals cross-listed on two sharing economy platforms: Airbnb and HomeAway. While the sociodemographic characteristics of hosts are salient on Airbnb, they are not on HomeAway. We find that when the perceived race of hosts is salient (i.e., on Airbnb), Black hosts are penalized: they receive lower ratings than they would have received for the same property if they were non-Black. This gap in evaluations has negative monetary implications for Black hosts on the Airbnb platform. We experimentally replicate these findings in a controlled setting, establishing a causal link between the perceived race of hosts and the ratings they receive. An additional experiment explores the underlying mechanism, revealing that people stereotypically expect Black hosts to perform worse than white hosts. Our findings suggest that because reputations are themselves biased, they lead to systematic indirect discrimination based on race. Unlike direct discrimination, discrimination generated via reputation systems is more elusive to detect and, consequently, more challenging to regulate.