by Kirk Kardashian
Oct 16, 2023
The technical term for platforms like AirBnb and Task Rabbit is “peer-to-peer exchange,” but most people know them as part of the sharing economy. The sharing economy, the part of commerce in which individuals share their resources with others for a fee, has been around for thousands of years.
Tuck Professor Nailya Ordabayeva teaches the marketing core course in the Tuck MBA program. She also teaches marketing principles to create value and build your personal brand in customized Tuck Executive Education programs for organizations.
However, things really took off with the advent of the Internet and large amounts of data, which allowed people to connect with potential consumers much more easily. eBay is probably the most successful and well-known example of the power of the sharing economy, but it is still only a small part of daily peer-to-peer activity. According to a study by Price Waterhouse Coopers, revenue in the sharing economy is expected to reach $335 billion by 2025.
In a new paper published in the Journal of Consumer Psychology, Tuck Associate Professor Nailya Ordabayeva finds a unique driver of consumer demand in the sharing economy: belief in meritocracy. She discusses the article in the following conversation.
How does this article fit into your research agenda?
This project is a continuation of my general interest in the role of people’s beliefs about society and economics in their product choices and their evaluation of the products they purchase. People with certain political beliefs tend to be more satisfied with their purchases than people with other beliefs. This led to a natural question: whether people’s ideological beliefs would have an impact on non-traditional market exchanges, more specifically on people’s exchanges, interactions, and preferences for peer-to-peer market providers.
They specifically chose to focus on a subset of ideological beliefs known as “justification of the economic system” (ESJ). What is ESJ and why did you decide to study it?
ESJ is a way to measure people’s tendency to justify the existing economic system as it offers everyone the opportunity to succeed. In other words: meritocracy. People with high ESJ scores believe that the economic system is fair and everyone deserves their high or low economic position. People with low ESJ scores believe that the system is unfair because everyone works hard, but many fail through no fault of their own. We chose to focus on ESJ and its role in the demand for peer-to-peer exchange because it represents an important dimension of ideological beliefs and we suspected that it goes beyond politics and religion.
Based on your previous research in this area, what would you believe about ESJ’s connection to peer-to-peer demand?
You might assume that consumers on the liberal side would be more interested in supporting peer-to-peer providers to give these non-traditional workers better opportunities in the market.
Did this prediction hold up?
Well, what we found is an additional motive that can actually produce the opposite prediction and pattern: people who believe the market is fair (a group that tends to be more conservative) actually have their own motives, Support peer-to-peer providers because you value the entrepreneurial spirit and hard work these providers must put in to succeed in the economy. The results show that it is not so clear-cut and there can be different reasons to support peer-to-peer providers. However, the common denominator is that higher ESJ values increase consumer interest in participating in the sharing economy.
The key takeaway is to understand the economic beliefs of your target audience and tailor your messaging, positioning and media buying to the market in which you operate. If your market has a high proportion of high ESJ employees, focus on how entrepreneurial and innovative you are as this will justify your ability to stay and compete in the market.
— Nailya Ordabayeva, associate professor of business administration
What are the key takeaways here for marketers and peer-to-peer providers?
The key takeaway is to understand the economic beliefs of your target audience and tailor your messaging, positioning and media buying to the market in which you operate. If your market has a high proportion of high ESJ employees, focus on how entrepreneurial and innovative you are as this will justify your ability to stay and compete in the market. Maybe even advertise alongside Shark Tank. If you want to reach people with low ESJ, use messages that emphasize your outsider status and indicate that you face additional obstacles in the current competitive market and need additional support.
Comments are closed.