The Role of Social Trust in Governing the Sharing Economy for Poverty Reduction

Abstract

Trust can be applied to many sectors, including the sharing economy. The sharing economy, a relatively new economic model, can be defined as an peer-to-peer (P2P) transactions. Online community platforms have been innovated to facilitate the sharing economy. This chapter aims to answer these two questions. First, what is the role of ‘trust’ in the sharing economy? Second, what are the reasons behind sharing economy growth through the transaction cost economics (TCE) lens? This research found that culture and the social background are determining factors in the level of trust. The finding from this research helps to fill the gap in regulating the sharing economy in emerging markets. Moreover, this chapter provides recommendations on how to design appropriate policy to regulate the sharing economy by using the TCE lens.