Questions & Answers
Which Assets Are Best Suited for the Sharing Economy?
Arun Sundararajan, professor of Information, Operations, and Management Sciences at New York University Leonard N. Stern School of Business, describes which products and services work well in sharing economy.
Transcript
Which assets are best suited for the sharing economy?
Assets that are low usage and high value tend to be the ones that are best suited for the sharing economy. So, for example, a car which costs a lot of money and you don't use it much, [or] your house—even though you use it a lot, the little time that you're not using it, the value of the asset is so much that it lends itself well. On the other hand, assets that you use a lot, like your mobile phone, that is unlikely to become a sharing economy product because you need it all the time. Assets where you get value from the mere act of ownership—something that shapes your sense of self because you own it, something that has sentimental value. I think of that as ownership value. Over there, I don't expect much of a transition. On the other hand, assets where there's a lot of consumption value, where you don't really care about possessing the asset. You just want to have it when you need it. You may not gain too much value from owning a $10,000 Rolex, but you want to be seen wearing it and maybe you want to be seen wearing different ones. So I think that's a sector which lends itself well to sharing economy consumption.