The influence of institutional mechanisms when trusting the sharing economy

Purpose: This study examines whether trust in the sharing economy (SE) is driven more by decentralised, peer-based mechanisms (normative or cultural-cognitive institutions) or centralised regulatory authority.
Design/methodology/approach: Structural equation modelling was performed to test a multi-level trust model using data from 635 respondents exposed to a between-subjects experimental vignette online survey.
Findings/results: The mechanisms of peer pressure, micro-level platform reputation, and meso-level platform brand assurance are the primary drivers of consumer trust and participation intention. The authority of macro-level independent regulation plays a significantly weaker role. The collective judgement of peers holds more sway for consumers than the oversight of formal authorities in establishing SE legitimacy.
Practical implications: Service providers must prioritise curating excellent platform reputations, as high peer ratings are a de facto market requirement. Platforms should strengthen their brand’s perceived reliability. Policymakers should adopt a nuanced regulatory approach, recognising that traditional top-down assurances are less influential than decentralised, social proof mechanisms for legitimising most SE services.
Originality/value: This is one of the first studies to integrate and contrast trust-building institutions across micro-, meso- and macro-levels within a single SE framework. It provides empirical evidence that normative and cultural-cognitive institutions are more effective than regulatory ones in legitimising the SE, highlighting a pivotal shift in how trust is established in digital, peer-to-peer markets.