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Nonlinear Pricing of Shareable Products

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Title:Nonlinear Pricing of Shareable Products
Authors:Weber, Thomas
Keywords:Strategy, Information, Technology, Economics and Society (SITES)
collaborative consumption
nonlinear pricing
sharing economy
Date Issued:07 Jan 2020
Abstract:We consider a durable-goods monopolist who is able to control the collaborative consumption of its goods on an aftermarket by a sharing tariff. Consumers are heterogeneous with respect to their respective need propensities in each period. We show that the firm may be able to extract this private information by offering a nonlinear pricing scheme, which amounts to a menu of options that distinguish themselves by different combinations of retail price and sharing tariff, whereby the latter is charged to owners at the point of sharing their item with a nonowner on the sharing market. The solution, which is obtained using optimal control theory, critically depends on the product's durability.
Pages/Duration:10 pages
Rights:Attribution-NonCommercial-NoDerivatives 4.0 International
Appears in Collections: Society, Information, Technology, Economics and Strategy (SITES)

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