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Peer-to-Peer Rental Markets in the Sharing Economy

Author

Listed:
  • Samuel P. Fraiberger

    (Northeastern University, Network Science Institute, 177 Huntington Avenue, Boston MA 02115)

  • Arun Sundararajan

    (Leonard N. Stern School of Business, New York University, 44 West 4th Street, New York, NY 10012)

Abstract

To investigate whether peer-to-peer rental markets for durable goods are welfare-improving, we develop a new dynamic model of such markets in which users with heterogeneous utilization rates may also trade in secondary markets. We calibrate our model with US automobile industry data and transaction-level data from Getaround, a large peer-to-peer car rental marketplace. Counterfactual analyses illustrate significant shifts away from asset ownership as marketplace access grows. Used-good prices fall and replacement rates rise, while gains in consumer surplus range from 0.8% to 6.6%. The changes in consumption mix and the surplus increases are significantly more pronounced for below-median income consumers.

Suggested Citation

  • Samuel P. Fraiberger & Arun Sundararajan, 2015. "Peer-to-Peer Rental Markets in the Sharing Economy," Working Papers 15-19, NET Institute.
  • Handle: RePEc:net:wpaper:1519
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    sharing economy; electronic markets; social media; durable goods; collaborative economy; on-demand; collaborative consumption; crowdsourcing; crowdfunding; p2p; Internet; ecommerce; Airbnb; Uber; Lyft; Lending Club; Blablacar; WeWork; Instacart; Ola;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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