Can an AI algorithm mitigate racial economic inequality? Only if more Black hosts adopt it


Machine learning algorithms can leverage vast amounts of consumer data, allowing automation of business decisions such as pricing, product offerings, and promotions. Airbnb, an online marketplace for vacation rentals and other lodging, created an algorithm-based smart-pricing tool that is free to all Airbnb hosts and allows hosts to set their properties’ daily price automatically. A new study investigated the impact of Airbnb’s algorithm on racial disparities among Airbnb hosts. Adopting the tool narrowed the revenue gap between white and Black hosts considerably, but because far fewer Black hosts used the algorithm, the revenue gap between white and Black hosts actually increased after the tool’s introduction.





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