Harvard Kennedy School Harvard University

Search this site

logo
Faculty Research Working Paper Series
Richard Zeckhauser
Frank Plumpton Ramsey Professor of Political Economy
phone: (617)495-1174
fax: (617)384-9340
Owning, Using and Renting: Some Simple Economics of the 'Sharing Economy'
Horton, John J., and Richard J. Zeckhauser. "Owning, Using and Renting: Some Simple Economics of the 'Sharing Economy'." HKS Faculty Research Working Paper Series RWP16-007, February 2016.
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.
Attachment
pdf

 

 


Copyright © 2017 The President and Fellows of Harvard College