Strategic decision-making in the sharing economy: Balancing profitability and sustainability in retail, rental, and second-hand markets using a game-theoretic approach

The sharing economy has transformed production and consumption patterns, offering both opportunities and challenges for manufacturers of durable goods. This paper investigates manufacturers' strategic choices in sharing markets, particularly in conjunction with second-hand channels. Using a Stackelberg game model, the study analyzes scenarios in which manufacturers participate in peer-to-peer (P2P) or proprietary business-to-consumer (B2C) rental platforms alongside traditional retail. The model incorporates consumer behavior, perceived ownership value, and market dynamics to assess profitability, sustainability and market-level indicators. Findings indicate that manufacturer participation in P2P rental platforms stimulates retail demand and increases profitability for both manufacturers and retailers, particularly when consumers engage in post-use renting. However, as consumers’ perceived value of rental products increases, manufacturer profitability declines—even when they actively participate in P2P platforms—despite a concurrent rise in overall consumer surplus. In the absence of P2P platforms, launching a proprietary B2C rental platform can enhance consumer welfare and environmental benefits, but it typically yields lower profitability than direct sales. This outcome may shift under favorable conditions such as low setup costs, high usage rate, and greater perceived utility from renting directly from the manufacturer. These results underscore that aligning profitability with sustainability requires manufacturers to move beyond traditional product sales and adopt integrated rental-service strategies. At the same time, policymakers should lower market barriers and build infrastructures that foster trust and resilience to support the long-term viability of shared consumption ecosystems.