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Events

Talk given by Prof. Dr. Steffen Zimmermann (University of Innsbruck)

Begin: Thu, 02. of Jun 2016 (10:00 AM)
Location: Warburger Str. 100, Room Q5.245

Abstract:

Online sharing platforms such as Zilok.com or Airbnb.com enable the sharing of durable goods among consumers and seek to maximize profits by charging transaction-based platform fees to lenders and/or borrowers. We develop an analytical model where consumers that are heterogeneous in their need to use a durable good decide whether to purchase and share (i.e., be a lender) or borrow (i.e., be a borrower). A monopoly online sharing platform decides on the platform fees charged to lenders and borrowers to maximize its profits. We find first that consumers with a greater need to use a durable good purchase and share, and consumers with a lesser need borrow. Second, online sharing platforms maximize profits only if the supply of a durable good matches demand - that is, the market must clear for platform fees to be profit maximizing. Third, the market-clearing condition requires that lender and borrower fees are classic strategic complements. Fourth, to maintain the market-clearing condition, online sharing platforms have to increase their lender fee or decrease their borrower fee in response to increases in the sharing price, increases in the durability, and decreases in the purchase price of a durable good, and vice versa. These findings indicate that commonly applied pricing models of online sharing platforms like Zilok.com or Airbnb.com can be improved.

Keywords: Sharing Economy, Online Sharing Platforms, Durable Good, Consumer Behavior, Platform Pricing Behavior.