Pricing and operating strategies for products in the sharing economy

Yeu-Shiang Huang, Chih-Chiang Fang and Szu-Yu Lin

International Journal of Production Economics, 2023, vol. 266, issue C

Abstract: The sharing economy represents an emerging consumption mode in which the right to utilize products is obtained via transactions instead of conventional ownership exchange. Thus, the idle period of a product during its life cycle can be minimized to promote environmental protection. This study focuses on the business-to-consumers (B2C) business sharing model, in which products are possessed by a firm and there are general and green consumers in the market, and it investigates the optimal operation strategy for a firm in consideration of both self-operated and third-party sharing platforms. The results show that when both general and green consumers are in the market, adopting a sharing economy business model will dramatically elevate a firm's profits. Moreover, when there are more green consumers than general consumers in the market, firms should adopt a compound operation strategy with both self-operated and third-party platforms. Since consumers would rather obtain a product by sharing to lower product usage, firms can determine whether to adopt the sharing economy business model by determining market demand for a product.

Keywords: Pricing; Sharing economy; Heterogeneous consumers; Sharing platform (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:266:y:2023:i:c:s0925527323002700

DOI: 10.1016/j.ijpe.2023.109038

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