Abstract:
The Sharing Economy (SE), also known as collaborative consumption, is an unregulated
industry, with individuals renting out underused assets to other individuals via a thirdparty
platform. Due to the nature of the SE, there is an imbalance of information, servicestandard
heterogeneity and risk involved in transacting with strangers. Despite these
factors, the SE has disrupted traditional industries, with millions worldwide participating
in this economy in one form or another, indicating that there are underlying factors which
impact consumption behaviour in this economy.
The SE uses online platforms and the ubiquitous nature of internet connectivity to reach
global audiences, and similarly so, uses various online signals to convey information to
those audiences. Online star rating systems and participant profile pictures are some key
examples of digital signals employed in a typical SE business to convey information that
would otherwise have been deemed unnecessary or automatically trusted in traditional
economy businesses. When considering the short-term accommodation industry in the
traditional economy, a 4-star rated hotel is accepted to depict an agreed level of service
quality because that rating is assigned by a third-party regulatory board, underpinned by
local government policy. Whereas a 4-star service rating score in the SE is based on
individual experiences, which is highly subjective. Profile pictures are a core visual
element on SE platforms, such as Airbnb, whereas that visual element is completely
absent from hotel websites and their online booking systems.
One research dimension lacking in current literature, is in consumer psychology,
specifically that which is associated with biases in the Sharing Economy. This research
focuses on cognitive biases, viz. bandwagon effect and affinity bias. Through an online
survey of 165 respondents, various online signals were tested to determine if impacts
consumption behaviour in the short-term accommodation SE, using Airbnb as a
representative SE. The analysis indicated that affinity bias influenced responses to visual
cues. Respondents, who had character traits of having affinity bias, used guest or host
profile pictures in their SE participation decision-making
