ABSTRACT:
Many online platforms have introduced markers that identify and highlight minority-owned businesses. This study examines whether such markers produce observable benefits for the targeted minority-owned businesses, whether there are unintended effects, and what mechanisms may explain these outcomes. Such markers may have differing effects on users depending on their level of motivation to support minority-owned businesses. Additionally, these markers may serve as a reminder of biases and lead consumers to form expectations about the quality of products or services solely based on the ethnicity of the business owner. Our analysis of Yelp Open Data suggests that the markers have varied effects on different types of businesses, with observable benefits concentrated in specific categories. Subsequently, the results from our online experiments show that the markers may have the intended effect of increasing users’ preference rank and likelihood of choosing minority-owned businesses, but primarily among individuals who were motivated to support such businesses. For those who were not motivated to support such businesses, the markers have an inconsistent impact, even when businesses align with what people expect minorities to excel at. Even worse, the markers may have a backfire effect, resulting in a decreased preference rank and likelihood of choosing businesses that operate outside of these expectations. We discuss the research and practical implications of these findings.
Key words and phrases: Minority-owned business, online platforms, cue utilization theory, cognitive bias, consumer behavior