Nonlinear Pricing of Shareable Products

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.