How Online Reputation Can Prevent Social Bias

How Online Reputation Can Prevent Social Bias

Diversity is valued in today’s modern society. Social bias, however, comes out naturally for some people. A new study from Stanford University (PDF) shows that online reputation can offset this social bias.

Stanford University Study

​To test for evidence of bias, the Stanford University researchers created an experiment-specific online platform. For this new platform, the researchers recruited nearly 9,000 users of Airbnb – an online platform that enables people to rent-out their homes or apartments – to play a behavioral game where participants have to invest a certain amount for various individuals based on mock profiles. The amount of investment for a certain individual serves as a measure of trust.
 
The researchers divided the nearly 9,000 participants into two groups. Group 1 participants were shown mock profiles of individuals with similar and different demographic than their own. Group 2 participants were shown profiles of individuals with similar and different demographic and added information about reputation – conveyed by star ratings and number of reviews.
 
Results showed that Group 1 participants invested greatly in people with similar demographic background. The more similar the demographic background, the more the participant invested or trusted such individuals, succumbing to social bias. Participants in Group 2, on the other hand, invested significantly in individuals with better reputations even though these individuals have completely different demographic background than their own.
 
The behavioral game created by Stanford University researchers revealed that profiles’ reputation prevented humankind’s affinity for favoring people similar to themselves.
 
The researchers weigh the results of the behavioral game with 1 million actual interactions between hosts and guests on the Airbnb online platform. The Stanford University researchers found that Airbnb hosts with better reputations attracted more demographically diverse guests.
 
"Our findings show that reputation systems can significantly increase the trust between dissimilar users and that risk aversion has an inverse relationship with trust given high reputation," the researchers wrote.

Homophily: Birds of a Feather Flock Together

​Homophily – the penchant for favoring those similar to ourselves – was first coined by researchers Lazarsfeld and Merton in the 1950s.
 
Homophily, however, wasn’t invented in the 50s. Plato observed in Phaedrus that “similarity begets friendship”, while Aristotle in Rhetoric and Nichomachean Ethics noted that people “love those who are like themselves”. The proverbial expression “birds of a feather flock together” unmistakably expresses the full concept of homophily.
 
There’s a wealth of literature that shows that homophily is evident in relationships that range from the closest ties of marriage, friendship, career support at work to mere initial contact or appearing with people in a public place.

Relevance to Your Business

​The findings in the Stanford study and the idea of “birds of a feather flock together” can be applied in your business in the following ways:
 
1. Build Better Online Reputation to Build Trust
In traditional e-commerce business, social bias isn’t a factor that drives selection as transactions are relatively anonymous.
 
If you’re working in sharing economy such as working as an Airbnb host or working in the health care sector where there are more personal interactions, there’s that danger of social bias.
 
According to the Stanford researchers “social biases figure as major hurdles to the growth” in services with more personal interactions “as they influence users’ perceptions of trust and risk”.
 
As shown in the Stanford study results, online reputation can counteract the natural behavioral tendencies that may lead to social biases. It’s, therefore, important to build a better online reputation through impressive star ratings to eradicate cultural and social boundaries and to attract new customers.
 
“The fundamental question we wanted to answer is whether technology [review or rating platforms] can be used to influence people’s perception of trust,” lead author of the Stanford University study Bruno Abrahao told the Stanford News. “These platforms can engineer tools that have great influence in how people perceive each other and can make markets fairer, especially to users from underrepresented minorities.”
 
If you notice homogeneity – same demographic – among your current clientele and you want to open your business to those with different sociodemographic background, it pays to build a better online reputation via impressive star ratings on credible online review platforms.
 
2. Use the Concept of “Birds of a Feather Flock Together” to Your Advantage
The principle of homophily or the concept of “birds of a feather flock together” is double-edged. On one hand, it’s positive; on the other hand, it’s negative.
 
“Homophily limits people’s social worlds in a way that has powerful implications for the information they receive, the attitudes they form, and the interactions they experience,” researchers McPherson, Smith-Lovin and Cook wrote in the study "Birds of a Feather: Homophily in Social" (PDF). They added, “Homophily in race and ethnicity creates the strongest divides in our personal environments, with age, religion, education, occupation, and gender following in roughly
that order.”
 
On the flip side, you can use the idea of “birds of a feather flock together” to improve your brand. It’s a matter finding similarities that don’t reinforce social biases. You can use the “birds of a feather flock together” concept, for instance, in getting reputable online reviews.
 
The study "How Online Reviews Influence Sales" (PDF) by Spiegel Research Center showed that online reviews written by verified clients are perceived as more credible than reviews written by anonymous reviewers.
 
“The verified buyer badge shows that the reviewer is a real consumer and not someone who was paid to write a review or someone who has an axe to grind against the company,” Spiegel Research Center said.
 
The trust placed by would-be clients in verified clients shows how the concept of “birds of a feather flock together” works, that is, people trust more those who have similar experience.
 
It’s important, therefore, to build a good number of impressive star ratings, not just in random online review platforms but in credible online review platforms – this means platforms where most of the reviewers, if not all of the reviewers, are verified clients who paid for the product or service.

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