Economics and design of sharing platforms

Basic research project

Consumers are increasingly discovering temporary use as an alternative to owning products. Enabling the temporary use of products is the fundamental idea of the sharing economy, whose turnover is expected to grow to up to 335 billion US dollars per year by 2025 according to various studies. Accordingly, Time Magazine ranks the idea of 'sharing instead of owning products' among the ten most important ideas that will permanently and sustainably change our society. Some economists even predict that the sharing economy could replace the currently prevailing capitalist ownership system and fundamentally change our way of life. We already have a hybrid system in which both economic systems partly complement each other (e.g., car manufacturers sell vehicles in the traditional way and rent out vehicles via car-sharing platforms such as car2go) and partly compete (e.g., AirBnB competes with the hotel industry for overnight stays). This trend is driven primarily by sharing platforms such as AirBnB or Uber. The innovative character of these platforms is the establishment of electronic markets based on mobile Internet technologies and the associated realisation of transactions between unacquainted lessees and lessors, which in turn leads to a more efficient utilisation of products. Research is needed into the economic impact of sharing platforms in order to verify the above-mentioned predictions.

The goal of this research project, entitled Economics and Design of Sharing Platforms (EcoDeShare), is to investigate the economic impact of sharing platforms on the different participants of a sharing ecosystem and on society as a whole. Based on this, different design options, such as different trust-building features, pricing models and regulatory measures, will be investigated. Finally, we will implement prototypes of sharing platforms test the theoretical results in experimental studies. Methodologically, the research project is primarily based on analytical modelling and experimental data analysis.

The desired outcome of this research project is a tested theory that supports sharing platforms in designing and pricing their online services as well as policy makers in developing a regulatory framework to regulate the sharing ecosystem.

Sponsor: FWF - The Austrian Science Fund

Project period: November 2019 - October 2023