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Owning, Using and Renting: Some Simple Economics of the "Sharing Economy"

Author

Listed:
  • Horton, John J.

    (New York University)

  • Zeckhauser, Richard J.

    (Harvard University)

Abstract

New Internet-based markets enable consumer/owners to rent out their durable goods when not using them. Such markets are modeled to determine ownership, rental rates, quantities, and surplus generated. Both the short run, before consumers can revise their ownership decisions, and the long run, in which they can, are examined to assess how these markets change ownership and consumption. The analysis examines bringing-to-market costs, such as labor costs and transaction costs, and considers the operating platform's pricing problem. A survey of consumers broadly supports the modeling assumptions employed. For example, ownership is determined by individuals' forward-looking assessments of planned usage.

Suggested Citation

  • Horton, John J. & Zeckhauser, Richard J., 2016. "Owning, Using and Renting: Some Simple Economics of the "Sharing Economy"," Working Paper Series 16-007, Harvard University, John F. Kennedy School of Government.
  • Handle: RePEc:ecl:harjfk:16-007
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    References listed on IDEAS

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    Cited by:

    1. repec:sgh:annals:i:44:y:2017:p:163-174 is not listed on IDEAS
    2. Chiara Farronato & Andrey Fradkin, 2018. "The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb," NBER Working Papers 24361, National Bureau of Economic Research, Inc.
    3. Stephen Sheppard & Andrew Udell, 2016. "Do Airbnb Properties Affect House Prices?," Department of Economics Working Papers 2016-03, Department of Economics, Williams College.
    4. Peitz, Martin & Schwalbe, Ulrich, 2016. "Zwischen Sozialromantik und Neoliberalismus: Zur Ökonomie der Sharing-Economy," ZEW Discussion Papers 16-033, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Schwalbe Ulrich & Peitz Martin, 2016. "Kollaboratives Wirtschaften oder Turbokapitalismus?: Zur Ökonomie der Sharing economy," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(3), pages 232-252, September.
    6. repec:eee:ejores:v:270:y:2018:i:2:p:586-598 is not listed on IDEAS
    7. repec:eee:jhouse:v:38:y:2017:i:c:p:14-24 is not listed on IDEAS
    8. Diogo G. R. Costa, 2016. "From Pipelines to Networks: The Intellectual Disruptions of Online Platforms," Economic Affairs, Wiley Blackwell, vol. 36(3), pages 379-389, October.
    9. Bergh, Andreas & Funcke, Alexander, 2016. "Does Country Level Social Trust Predict the Size of the Sharing Economy?," Working Paper Series 1130, Research Institute of Industrial Economics.
    10. Mark Merante & Keren Mertens Horn, 2016. "Is Home Sharing Driving up Rents? Evidence from Airbnb in Boston," Working Papers 2016_03, University of Massachusetts Boston, Economics Department.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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