Online marketplaces may encourage bias

Online marketplaces that allow people to peddle a place to stay or a ride in their car have been disruptive, creating communities of small sellers. But what if measures intended to foster trust between buyers and sellers online, such as sharing a photo of the seller, actually cause people to discriminate against one another based on unconscious bias?

In a new study posted online and now under review for publication, Harvard Business School economists analyzed listings on the popular online rental marketplace Airbnb.com and found that black hosts in New York City consistently charge less than nonblack hosts, even when controlling for factors such as location and apartment quality. The authors interpret the difference — nonblack hosts charged 12 percent more than black hosts for equivalent rentals — as an indication of discrimination because pricing reflects what hosts are able to charge; lower prices reflect lower demand.

In research they have not yet published, the team also contacted hundreds of hosts using stereotypically white or black names, seeking a place to rent. They found that hosts were far more likely to respond to would-be room renters named “Greg,” for example, than “Jamal.”

“There are 50 years of history of trying to reduce discrimination in housing and education,” Luca said. “Companies build marketplaces that could either encourage or discourage discrimination and you’d like to see companies held to the fire a little bit. They can encourage trust in the marketplace, but don’t almost explicitly encourage discrimination by making hosts and guests feel like they need to upload their photos.”

In a statement, an Airbnb.com spokesman questioned the findings:

“We are committed to making Airbnb the most open, trusted, diverse, transparent community in the world and our terms of service prohibit content that discriminates. The data in this report is nearly two years old and is from only one of the more than 35,000 cities where Airbnb hosts welcome guests into their homes. Additionally, the authors made a number of subjective or inaccurate determinations when compiling their findings.”

The spokesman noted that prices are often linked to the number of reviews of the apartments, a factor not taken into account by the paper, which examined only the overall ratings. He also pointed out that hosts choose how much to charge.

Despite the real questions the company has raised about the study, dozens of studies have arrived at the same conclusion: We all carry unconscious prejudices and biases with us that may lead us to discriminate against other people, even when we don’t want to.

The Internet is often perceived as a medium that can decrease discrimination. But it is important to remember that the way systems are built can result in discrimination, even unintentionally. An MIT professor last year found that typing traditional African-American names into Google more often returned ads with links for criminal records probes than typing white names.

Mahzarin Banaji, a psychology professor at Harvard University said that a good business practice would be to keep the profile photo out of view when people were browsing property listings.

“Important as this study is, it is hardly alone,” Banaji wrote in an e-mail. “There are thousands of studies showing that a person’s social group influences decisions about them. When assessments of competence and trust are involved, they directly influence life opportunities, including financial remuneration.”