Navigating Peer-to-Peer Pricing in the Sharing Economy

Abstract

The sharing economy has introduced a third party into traditional peer-to-peer transactions: the sharing platform. These platforms, far from being passive intermediaries, maintain a significant role in determining the price mechanisms of peer-to-peer transactions, as well as, in some cases, unilateral determination over the prices themselves. This article conducts a review of the four price mechanisms in operation within the sharing economy: provider-to-platform, consumer-to-platform, peer-exchange price, and platform commission. This article shows that the tri-partite relationship between platform, provider, and consumer is often characterised by distributive outcomes which unilaterally favour the platform, enabled through information asymmetries. This article forwards a number of possible mechanisms that may lead to this misbalance and concludes with a road map for platform actions, policy options, and future research into how the sharing economy could achieve more balanced pricing procedures.