Intermediation in a Sharing Economy: Insurance, Moral Hazard, and Rent Extraction

Product Pricing in a Peer-to-Peer Economy

“…The growth of the peer-to-peer economy has largely been enabled by innovative intermediaries (such as AirBnB) who were able to create electronic platforms to match consumers and overcome market imperfections such as moral hazard, specific to collaborative consumption. Weber [34,36] showed that a sharing intermediary may be able to resolve the moral-hazard problem for risk-neutral parties and extract a large portion from the gains of trade. In that view, sharing markets lead to a Pareto improvement by increasing the surplus for all parties involved.…”

“…In the former case, the marginal cost corresponds to the invoice price, while in the latter it corresponds to the cost of producing an extra unit. Since intermediaries have the potential to increase efficiency in sharing markets [36], we assume that sharing markets clear, and therefore allow for the discovery of an efficient market price without arbitrage. We then examine how prices are affected by sharing markets when the sellers of products can endogenously react.…”

Controlling and Pricing Shareability

“…With the emergence of peer-to-peer trading platforms, such as AirBnB or Eloue, many consumers' preferences have been transformed to now favor access over ownership (Bardhi and Eckhardt 2012;Nielsen 2014;Belk 2014;Weber 2015). Sharing intermediaries have been able to solve problems of asymmetric information (Weber 2014), fuelling the growth of peer-to-peer exchanges (Einav et al 2016). …”

Openness and Legitimacy Building in the Sharing Economy: An Exploratory Case Study about CouchSurfing

“…Given above difference, digital service platforms, such as Airbnb or Uber, have established themselves as 3 rd party intermediaries coordinating market transactions for the consumption of idle capacities of rivalrous, privately owned goods [39]. Key to these platforms are reputation systems based on peerreviews of their user bases, which mitigate the moral hazard of transacting with strangers [12].…”