A Model of Platform Competition in Sharing Economy
By Zhijie Lin (Nanjing University) & Zhenhua Wu (Arizona State University)
Despite the growing debates on the impact of sharing economy on traditional industries, the literature on sharing economy still lags. Motivated by the competition between suppliers or asset owners, between sharing economy platforms, and between sharing economy providers and traditional sectors, we develop a model on cross-platform and within-platform competition of sharing economy platforms with two-sided networks as infomediaries. Our results suggest that renters encounter a higher participation price when the within-platform competition intensity among owners is stronger. We also find that own-group externality could provide a signal of reliable and trustworthy service to ensure trust in the renting-leasing relationship.
Full Article: Social Science Research Network