HKS Affiliated Authors

Excerpt

Owning, Using and Renting: Some Simple Economics of the “Sharing Economy”. Richard Zeckhauser, January 15, 2019, Paper, "New Internet-based “sharing economy” markets enable consumer-owners to rent out their durable goods to non-owners. We model such markets, and explore their equilibrium both in the short-run, before ownership decisions can be revised, and in the long-run, in which they can. We find that “sharing economy” markets always expand consumption and increase surplus, but may increase or decrease ownership. Our analysis also considers the costs of bringing unused capacity to the market. To complement our theoretical work, we conduct a survey of consumers, finding broad support for our modeling assumptions. For example, ownership is determined by individuals’ forward looking assessments of planned usage weighed off against the price of the good. The survey also allows us to offer a partial decomposition of the bring-to-market costs, based on attributes that make a good more or less amenable to being shared." Link