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Strategic Pricing, Lifespan Choices and Environmental Implications of Peer-to-Peer Sharing


  • Francisco J. Andre

    (Dpt. Economic Analysis and ICE, Universidad Complutense de Madrid)

  • Carmen Arguedas

    (Dpt. Economic Analysis, Autonomous University of Madrid)

  • Sandra Rousseau

    (Faculty of Economics and Business, KU Leuven)


Peer-to-peer sharing has become increasingly popular in recent years. Many digital platforms exist that allow individuals to use others’ belongings part-time. These platforms explicitly mention their green credentials, as the environmental benefits of such sharing initiatives are often taken for granted. However, several recent empirical studies show evidence of the contrary. For the first time in the literature, we provide a theoretical framework to analyze the economic and environmental implications of peer-to-peer sharing. We present a stylized model where a monopolist supplies a product that is suitable for rent on a sharing platform. Counterintuitively, we find that the existence of such a platform is typically beneficial for the monopolist, especially if it can strategically choose the price and lifespan of the product to affect the use price in the sharing market. Such a scenario is not at all beneficial for consumers, especially for those who rent the good rather than buy it. Moreover, the existence of the sharing platform induces higher use and (under some likely conditions) larger production levels and shorter lifespans of the products. The combination of these three aspects contributes to a worse environmental impact with sharing, which provides a theoretical rationale for the aforementioned empirical studies.

Suggested Citation

  • Francisco J. Andre & Carmen Arguedas & Sandra Rousseau, 2022. "Strategic Pricing, Lifespan Choices and Environmental Implications of Peer-to-Peer Sharing," University of East Anglia School of Economics Working Paper Series 2022-03, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:ueaeco:2022-03

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    References listed on IDEAS

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    More about this item


    peer-to-peer sharing; environmental externalities; strategic pricing; strategic lifespan.;
    All these keywords.

    JEL classification:

    • D16 - Microeconomics - - Household Behavior - - - Collaborative Consumption
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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