Peer-to-Peer Sharing of Private Goods: Sellers’ Response and Consumers’ Benefits

We study how the presence of consumers’ peer-to-peer sharing option in addition to exclusive ownership affects sellers’ pricing and product design decisions, as well as consumers’ benefits. We identify the conditions in which a seller would accommodate or hinder sharing by pricing the product appropriately. The seller’s profit can be enhanced by accommodating sharing when consumer valuation heterogeneity is neither too high nor too low. Second,...