The Rise of Airbnb

For years, Airbnb gave hosts extensive discretion to accept or reject a guest after seeing little more than a name and a picture, believing that eliminating anonymity was the best way for the company to build trust. However, the apartment rental platform failed to track or account for the possibility that this could facilitate discrimination.

After research published by Harvard Business School associate professor Michael Luca and others provided evidence that Black hosts received less in rent than hosts of other races and showed signs of discrimination against guests with African American sounding names, the company had to decide what to do.

In the case, “Racial Discrimination on Airbnb,” Luca discusses his research and explores the implication for Airbnb and other platform companies. Should they change the design of the platform to reduce discrimination? And what’s the best way to measure the success of any changes?