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Optimal investment strategy of a free-floating sharing platform

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  • Sun, Xiaojie
  • Tang, Wansheng
  • Chen, Jing
  • Zhang, Jianxiong

Abstract

Recent free-floating platforms offer service to consumers via a sharing model that can substantially increases the service’s circulation and utilization. This paper examines the optimal investment strategy in product quality, input quantity, and dynamic advertising for a free-floating sharing platform that owns a durable product and leases it to consumers. We model the problem as an optimal control problem and solve it via the maximum principle and an algorithm. We discuss four investment strategies, one single-stage strategy and three two-stage strategies (flexible quality, flexible quantity, and dual-flexible). Our findings provide new insights and implications into the sharing platform’s investment strategy.

Suggested Citation

  • Sun, Xiaojie & Tang, Wansheng & Chen, Jing & Zhang, Jianxiong, 2020. "Optimal investment strategy of a free-floating sharing platform," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 138(C).
    • Handle: RePEc:eee:transe:v:138:y:2020:i:c:s1366554520306098
    DOI: 10.1016/j.tre.2020.101958
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