Social Interactions in the Sharing Economy: A Double Edge Sword?

Dafna Goor, PhD candidate, Harvard Business School Amir Grinstein, Associate Professor of Marketing, D’Amore-McKim School of Business, Northeastern University, Boston & School of Business and Economics, Vrije University Amsterdam

EXTENDED ABSTRACT

The sharing economy – peer-to-peer platforms that drive collaborative consumption (Milanova and Maas 2017; Zervas, Proserpio, and Byers 2017) – represents a prevalent societal trend. This trend has led to the exponential growth of numerous businesses, like Airbnb and Uber, which attract significant attention from consumers, investors, regulators, and the popular press. Consumers have different motivations that lead them to participate in the sharing economy. Often the literature mentions economical, social, environmental, and cultural motivations (e.g., Milanova and Maas 2017; Möhlman 2015) although the first two are more often highlighted (e.g., Eckhardt and Bardhi 2015; Frenken and Schor 2017; Neoh, Chipulu, and Marshall 2017). We confirmed this observation by conducting two preliminary studies. First, a survey (N = 148, Mturk) suggests that consumers’ economic and social motivations are highly associated with entering the sharing economy, while environmental and cultural motivations are only marginally important. Further, it appears that sharing economy actors capitalize on social motivations even more than on economic motivations. An analysis of 79 advertisements of 10 leading sharing economy brands broadcasted between 2016-2018, found that the vast majority of advertisements build on social-related messages (68.4% emphasized people and 89.9% emphasized community; compared with 30.8% emphasizing the economic value). The centrality of social motivations in the sharing economy, from both marketers/service providers and consumers, makes it a valuable area to study, and so far this area of work has been neglected. Furthermore, research on the social motivations of the sharing economy is valuable because unlike the other central motivation (i.e., economic value), the social benefits from the sharing economy are not indisputable. The very limited work on social dimensions of the sharing economy offers mixed views. On the one hand, some work emphasize the value from meeting new people or being part of a community (e.g., Albinsson and Perera 2012; Bucher, Fieseler, Fleck, and Lutz 2018). A different view argues that social interactions that are associated with the social dimension of the sharing economy – especially too intense or physically close interactions or due to privacy concerns – may not necessarily elicit a positive consumer response (e.g., Bialski 2012; Bucher et al. 2018; Milanova and Maas 2017). The current research aims to contribute to work on the sharing economy, social interactions and customer satisfaction. We study the role of social interactions and the conditions under which these can lower satisfaction. We identify a mediator – social anxiety – and test a moderator, an intervention to minimize social interactions and thus increase customer satisfaction. Specifically, we posit and demonstrate the following: H₁: Sharing (vs. traditional) economy experiences would decrease customer satisfaction, when social interactions increases. H₂: The negative influence of sharing (vs. a traditional) economy experiences on customer satisfaction is due to increase in social anxiety. H₃: Minimizing social interactions in sharing economy experiences would attenuate the negative influence on customer satisfaction. In Study 1, we sought to understand the effect of sharing (vs. traditional) economy on customer satisfaction, especially the social anxiety that could arise by social interactions specifically in the sharing economy. One-hundred sixty-seven participants on mturk imagined going on a one-week trip. In the sharing (vs. traditional) economy condition, they imagined staying at an Airbnb apartment (vs. YMCA) where they get a private room but share the house amenities with other people. The sharing economy experience was rated as generally more dissatisfying (M=4.65) compared to the traditional economy experience (M=4.10, p=.026). Moreover, participants indicated that the presence of other people – a conservative testing of social anxiety – would bother them at the Airbnb (M=5.06) more than at the YMCA (M=4.35, p=.007). Mediation analyses showed that social presence (a×b=.2244, 95% CI = [.0640,.3964]) mediated the effect of sharing (vs. traditional) economy on dissatisfaction. In Study 2, we chose to investigate the effect of social interactions in the sharing economy in a context that, according to our preliminary study, has the greatest social appeal and the lowest economic appeal – shared dinning. We also tested in this study for alternative underlying mechanisms: privacy concerns and lack of control. One-hundred and sixty undergraduate students imagined going to dinner with a friend at a place called EatOut in a nearby city. In the sharing economy (vs. traditional economy) condition, they imagined going to social eating (vs. a restaurant). Participants imagined that during the dining experience there are 10 other guests in the private home (vs. restaurant), the chef and host (vs. chef) serves traditional Italian food, and all the guests are engaged in conversations. The results reveal that sharing economy decreased satisfaction (i.e., comfort, enjoyment, and pleasant experience compared to traditional economy (M=4.23, p=.009; and M=4.74, p=.025; respectively). Importantly, sharing (vs. traditional) economy also increased social anxiety (e.g., “The presence of others would bother me,” F(1,159)=6.99, p=.009), privacy concerns (F(1,159)=10.70, p=.001), and lack of control, but a competitive mediation analysis revealed that the social anxiety better explained the psychological process, corroborating the results of Study 1. Study 3 further manipulated social interactions in another context and tested an intervention to minimize customer dissatisfaction. In this study, we used a service that is associated mostly with financial motivations – ride sharing, to explore the effect of social interactions on consumers experience in situations where social interactions are less meaningful. Four-hundred and seven participants on Mturk imagined that they have a meeting in the city and take Uber Pool to get there. The driver arrives quickly and the app indicated that they will arrive to the meeting on time. To manipulate social interactions, participants were assigned to be (1) the only passenger in the car, (2) sit next to another passenger in the car, (3), sit next to another passenger who tries to open a conversation, or (4) sit next to another passenger who is wearing headphone and concentrated on their phone. Greater social interactions (conditions 2 and 3) decreased customer satisfaction compared to the control condition (condition 1; p’s < .001). Importantly, lower social interactions (condition 4; p’s = .043) increased satisfaction to the same level of the control condition. Our findings have important implications for practitioners, marketers, and researchers who focus their work on consumers experience in general and specifically in the sharing economy.

References

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