Banned from the sharing economy: an agent-based model of a peer-to-peer marketplace for consumer goods and services
Authored by Adrien Querbes
Date Published: 2018
DOI: 10.1007/s00191-017-0548-y
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Platforms:
NetLogo
Model Documentation:
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Abstract
The emergence of profit-based online platforms related to the Sharing
Economy, such as BlaBlaCar and Airbnb, provides new means for end users
to create an income from their possessions. With this opportunity,
participants have to make strategic economic decisions despite limited
formal expertise and information. Decentralization (using digital
technologies) and reputation (using user reviews) are the core
mechanisms chosen by these platforms to mitigate these limitations and
to work efficiently as online matchmakers. We test the performance of
these two mechanisms by studying the allocative efficiency (in terms of
value and volume of transactions) of simulated marketplaces under
different types of motivation from the participants and control from the
platforms. As a result, we find an inverted-U relationship between the
decision-making leeway available to the participants and the platform's
allocative efficiency. From the participants' perspectives, too much
freedom or too many barriers lead to market failures affecting specific
participants: low-end consumers are banned from the marketplace while
high-end providers experience lower levels of activity. As governance
advice for these platforms, we show the limitations of promoting these
platforms on the sole motive of monetary rewards.
Tags
Competition
Evolution
Design
complex adaptive system
Search
information
Demand
People
Online
2-sided markets
User reviews
Decentralization
Sharing economy
Collaborative consumption
Product quality
Moral
hazard
Intermediation