經(jīng)濟(jì)事務(wù)研究所-共享經(jīng)濟(jì)：陷阱與承諾（英）-2021.10-171正式版

StheHARINGECONOMYitsPITFALLSandPROMISESMICHAELC.MUNGERTheSharingEconomy:ItsPitfallsandPromisesTHESHARINGECONOMY:ITSPITFALLSANDPROMISESMICHAELC.MUNGERFirstpublishedinGreatBritainin2021byeInstituteofEconomicA?airs2LordNorthStreetWestminsterLondonSW1P3LBinassociationwithLondonPublishingPartnershipLtdwww.londonpublishingpartnership.co.ukemissionoftheInstituteofEconomicA?airsistoimproveunderstandingofthefundamentalinstitutionsofafreesocietybyanalysingandexpoundingtheroleofmarketsinsolvingeconomicandsocialproblems.Copyright?eInstituteofEconomicA?airs2021emoralrightsoftheauthorshavebeenasserted.Allrightsreserved.Withoutlimitingtherightsundercopyrightreservedabove,nopartofthispublicationmaybereproduced,storedorintroducedintoaretrievalsystem,ortransmitted,inanyformorbyanymeans(elec-tronic,mechanical,photocopying,recordingorotherwise),withoutthepriorwrittenpermissionofboththecopyrightownerandthepublisherofthisbook.ACIPcataloguerecordforthisbookisavailablefromtheBritishLibrary.ISBN978-0-255-36792-9(interactivePDF)ManyIEApublicationsaretranslatedintolanguagesotherthanEnglishorarereprinted.PermissiontotranslateortoreprintshouldbesoughtfromtheDirectorGeneralattheaddressabove.TypesetinKeplerbyTTProductionsLtd&CONTENTSAbouttheauthorAcknowledgementsSummaryviiviiiixFiguresxii12Introduction1Revolutionsanddisruption4TransactioncostsandcommodifyingexcesscapacityOwning,rentingandthe?commodi?cationofexcesscapacity810Costintwo-sidedmarkets:who?isbuyingandwhoisselling?173Platformsandownership24SellingtrustraisestheproblemofantitrustPlatformsdon’tsellstu?Decentralised‘retail’ownershipistooexpensiveWikipediaandtoollibraries:beyondrental3336384245Commodifyingexcesscapacity46Middlemen:sellersoftransactioncostreduction55emiddlemanplatformeconomy59vCONTENTSBacktotransactioncosts:whyownershipistooexpensive64678Ride-sharing72Uber:theoriginNotataxicompany?Surgepricing747677Problemswithdisruptivetechnology88Sabotage:whentherefereeisalsoaplayerAdi?erentexample:‘Uberbutforplanes’Fairness,exclusionand‘socialcredit’91102109Conclusion114ChangeasaconstantSaltationSeparationegeneralanswer:permissionlessinnovationFinalwords:thenextthreecrises116119121123128ReferencesIndex137147152AbouttheIEAviABOUTTHEAUTHORMichaelMungerisaresearcherandadministratoratDukeUniversityinNorthCarolina.HeisaseniorresearchfellowattheIndependentInstituteinOakland,California,andattheAmericanInstituteforEconomicResearchatGreatBarrington,Massachusetts.HehastaughtatDartmouthCollege,theUniversityofTexas,andtheUniversityofNorthCarolina.Hispublishedresearchhascoveredspa-tialtheory,politicaldecision-makingandtheproblemofvoluntaryexchange.Hismostrecentbook,IsCapitalismSustainable?,waspublishedin2019bytheAmericanIn-stituteforEconomicResearch.HeisapasteditorofthejournalPublicChoice,aswellasapastpresidentofthePublicChoiceSociety.His?rstprofessionalpositionwasasasta?economistattheUSFederalTradeCommission.HereceivedhisPhDineconomicsatWashingtonUniver-sityin1984.viiACKNOWLEDGEMENTSisprojectwassuggestedbyJamieWhyte,andwasre-workedbyRichardWellings,bothoftheIEA.Mythankstothemfortheproposal,andtoSyedKamall,alsooftheIEA,forseeingthingsthrough,whenthereweremanycompet-ingdemandsonhistimeandresources.anksareduetoCurtisBramforresearchassistance;thanksalsotoJonWainwrightforconvertingthemanuscriptintosomethingresemblingworkableprose.NumeroushelpfulsuggestionsandimprovementsweresuggestedbyDrewMillard.Allofthosewhodeservecreditforwhatisdonewellhereareblamelessforwhatisdonepoorly;forthat,Iamsolelyresponsible.eideasexpressedhereowecredit,butnoblame,toseminarparticipantsattheUniversityofColorado,Okla-homaStateUniversity,theUniversityofTexas,andTrinityCollegeintheUS,aswellastheInstituteforLiberalStud-iesinCanada,andtheANUandNotreDameinAustralia.Finally,thankstoDonnaGingerellafortoleratingmyneedtospendfarlongerthanwasplausibleworkingonthede-tailsherein.viiiSUMMARY?Platformsareinstitutionsthatsolvetheproblemsofdeliveringagoodorservice,ofclearingpayments,andofcreatingtrustbetweenbuyerandseller.?Inthepasttwodecades,thephysicallocationsinwhichtransactionstakeplace,suchasthecitymarketorshoppingcentre,haveincreasinglybeenreplacedbyonlineplatforms.eplatformrevolutionisaneconomicrevolutionasmomentousastheNeolithicandIndustrialRevolutions.?eplatformrevolutionisdeliveringreductionsinthetransactioncostsofrenting.Newanddi?erentwaysofpartitioningshort-termownershiphaveemerged.esharedfeatureofthesemarketsisthattheyenablepro?tablemeansofcommodifyingexcesscapacitythatuntilnowcouldonlybewasted.Wepayforstoragetwice:wastedspace,andforgonecapitalvalue.?eplatformeconomyismakingmoreintensiveande?cientuseofresourcesthatareotherwiseidle.Inthelongrun,theconsequencewillbeasharpincreaseinthedurabilityandaveragelifeofthoseresourcesastheyarereplaced.?Bymonetisingthedeadweightlossofqueuing,newsoftwareplatformsarecapturingmuchofthevalueixSUMMARythatwouldpreviousl?havebeenwastedb?thefrictionoftransactioncosts.?Entrepreneurscannowmovefarbe?ondaspiringonl?tosellproductsorservices.e?cansellreductionsintransactioncostsalone.?ServicessuchasUberaresoftwareplatformswhichmakepossibletransactionsthatotherwisecouldnottakeplace.Uberisadisruptivetechnolog?whichsellsreductionsintransactioncosts,enablingawidevariet?ofpeer-to-peerexchangesandarrangements.?eplatformeconom?ismakingproductsandservicesthatoncedidnotexist,orwereavailableonl?tothewealth?,availableuniversall?andpracticall?freeofcharge.?Somenewsoftwareplatformsarebeingprohibitedb?regulatorsprecisel?becausethe?workbetteranddisrupttheexistings?stemsofcron?ism.RegulatorswhoplacerestrictionsonservicessuchasAirbnbt?picall?ignoretherealpricesignalbeingsentb?thecreationofthenewplatforms,whichisthatsuppl?isbeingrestricted.ecorrectsolutionistosethousingfreetoexpandresidentialoptions.?Regulatorsmustembracepermissionlessinnovation,adoptingastrongpresumptioninfavourofallowingexperimentationwithnewtechnologiesandnewbusinessplatforms.?Ontheotherhand,regulatorsmustavoidoutdatedthinkingaboutantitrustpolic?asfocusingonmarketstructure.Platforms,b?theirnature,aregiants.An?platformisb?de?nitionamonopol?withinitsownxSUMMARyboundaries;infactthatistheadvantageofplatforms.enewregulator?frameworkmustfocusonlimitingthepowerofplatforms,especiall?theirpoliticalpower,ratherthanforcingine?cienc?andwasteb?restrictingtheirsize.xiFIGURESFigure1HousingbytenureinEngland:1918–2019Figure2SharingeconomyusersandUSpopulation14191INTRODUCTIONisbookaddressessomerecentchangesinavarietyofmarketsandbusinessactivities.ecoreargumentisthatmoreandmoremarketsare‘two-sided’,withconsumersandsellersbothactivelyseekingwaystotransact.Acommonwaytocharacterisetwo-sidedmarketsis‘peer-to-peer’;thereasonthisisimportantisthattwo-sidedmarketsaredi?erentfromthetraditional‘price-takingbe-haviour’modelsusedintextbookeconomics.Atthetimethisbookisgoingtopress,theglobalCovid-19pandemichasgiventhistransformationanewurgency.e‘place’wheremanytransactionsoccurwasoncephysical,suchasatacitymarketoramall.Butinthepasttwodecadesthesephysicallocationshaveincreasinglybeenreplacedbyvirtualdomainscalled‘onlineplatforms’.Oneofthe?rstattemptstomodelthisphenomenonwasRochetandTirole(2003:990).Astheyputit:Buyersofvideogameconsoleswantgamestoplayon;gamedeveloperspickplatformsthatareorwillbepop-ularamonggamers.Cardholdersvaluecreditordebitcardsonlytotheextentthattheseareacceptedbythemerchantstheypatronize;a?liatedmerchantsbene?t1THESHARINGECONOMy:ITSPITFALLSANDPROMISESfromawidespreaddi?usionofcardsamongconsumers.Moregenerall?,man?ifnotmostmarketswithnetworkexternalitiesarecharacterizedb?thepresenceoftwodistinctsideswhoseultimatebene?tstemsfrominter-actingthroughacommonplatform.Iwillarguethatplatformsshouldbethoughtofassellingreductionsin‘transactioncosts’,orthecostsoforganisingandconsummatinganexchange,rentalorothermarketaction.1ethreeaspectsoftransactioncoststhatarerelevanttoonlineplatformsaretriangulation

(?ndinginformationandotherpartiestotransactwith),transfer(thedeliver?oftheproductorservice,andmakingthepa?ment),andtrust

(theabilit?torel?onthetermsoftheagreementwithoutresorttoexternalenforcement).Inthissetting,muchoftheactioninexchangeis‘peer-to-peer’.Ownersandpotentialusersofdurablessuchascarsor?ats?ndwa?stoshare,withthetransactionslook-inglikerentals.evalueoftheseexchanges,takenindi-viduall?,issmall,andcanbeblockedb?transactioncosts.Platformsactasmatchmakers,ormiddlemen,arolethattradershavetakensincetheirver??rstexchangesthou-sandsof?earsago.edi?erencenowisthatthematch-makersaresellingonl?reductionsintransactioncosts1Oneofthemostgeneralde?nitionsof‘transactioncosts’wasgivenb?DouglassNorth(1992),whodescribedfourcomponents:measuring(b?unit,b?weight,orb?periodoftime),enforcement(ensuringhonest?andcompliancewithcontractualobligations),ideolog?(attitudestowardthetransaction),and‘thesizeofthemarket’(problemsofscale,aswellastransportation).2INTRODUCTIONandoftenhavenodirectroleinbuyingorsellinganything;theyjusthelpbuyersandsellersintwo-sidedmarkets?ndeachotherandtransact.isisquitedi?erentfromthewaythatmanufacturersareoftenconceivedinacademiceconomics(EvansandSchmalensee2016:2):Traditionalmanufacturingbusinesses,forinstance,buyrawmaterials,makestu?,andsellthatstu?tocustom-ers.Butmatchmakers’rawmaterialsarethedi?erentgroupsofcustomersthattheyhelpbringtogether,notanythingthattheybuyatall.Andpartofthestu?theyselltomembersofeachgroupisaccesstomembersoftheothergroups.Allofthemoperatephysicalorvirtualplaceswheremembersofthesedi?erentgroupsgetto-gether.Forthisreason,theyareoftencalledmultisidedplatforms.ey’replaceswhereallofthesedi?erentgroupscanmeet[emphasisadded].Platformshavealwaysbeenwithus,asameansofreducingtransactioncosts.Butthedramaticincreaseintheimpor-tanceofplatformsinthelasttwodecadesisrevolutionary.32REVOLUTIONSANDDISRUPTIONEconomicrevolutionsdonotcarewhatwethinkofthem.Forpeoplewhobelievetheyarethecentreoftheuniverse,orfortechnocratswhowanttopullstringsandpushleversto‘runthings’,thatcanbeverydisquieting.Butfailingtounderstandthateconomiesareorganiccomplexsystemscancauseproblemsthatmakethingsmuchworse.esesystemshaveinternaldynamicsthatoperateindependent-lyofthewillofthestate,orofanyindividualforthatmatter.1isbookisanattempttoexplainthedynamicsofthecomplexsystemscalled‘platforms’andtoexplainwhy,whenplatformsareworkingproperly,wenevernoticeproblemsinthe?rstplace.Wefacetheintersectionoftwogreatsourcesofturmoilformarketsandsociety:theconstantcon?ictoverthede-greeofstatedirectionoftheeconomy,andtheprofoundlydisruptivee?ectofthenew‘platformeconomy’.Eitherofthesealonewouldmakefordisquietingpolitics;together,1‘Complexsystems’ineconomicsconsistofsetsofinteractingindividualswhomaynotbefullyawareoftheirmutualdependence–whoupdatetheiractionsandstrategiesinresponsetotheoutcometheymutuallycreatebutthatnonemayintend.isde?nitionisgiveninArthur(1999),butitisconsistentwithHayek’s(1988)notionofthe‘extendedorder’.4REVOLUTIONSANDDISRUPTIONtheyhavethepotentialforwrenchingandunpredictablechange.Inarecentarticle,Littlewood(2018:444)triedtopeeratleastalittlewayintothefuture:ItisnotoftenthatIquotewithapprovalthewordsofTonyBenn,theerstwhileleaderoftheLabourleft.HisvisionofasocialistBritainfailedinhislifetime,butashesaid,‘Everygenerationhasto?ghtthesamebattlesagainandagainforthereisno?nalvictoryandno?naldefeat’.Hewasright:theidenticalargumentappliestothestruggleforfreemarkets.Inademocracythebattleofideasisneverover.etriumphalismfollowingtheatcherandReaganyearsandthefalloftheBerlinWallwasmisplaced:itturnsoutthattheintellectualadvanceofmarketliberalisminthe1980swasnotsomeperma-nentGalileo‐likediscoverychanginghumanunder-standinginperpetuity.Itwasmerelyaprotractedskir-mishwhichisnowbeingre‐enacted,notnecessarily,onthisoccasion,totheadvantageofthoseofuswhofavourfreemarkets.Towinthisclashofideologiesforasecondtime,freemarketproponentsneedtorecalibratetheammunitiontheyaredeploying.Simplystatingthatargumentsaboutthemarketwereaddressedandresolvedseveraldecadesagowillnotpersuadeanewgenerationthatbigadvancesinstatepoweraredeeplyundesirable.No?nalvictory;no?naldefeat.Policyreactionstothedy-namismofmarketcapitalismanddemocraticpoliticsre-quireagilityintacticsandnimblenessofmind.isbook5THESHARINGECONOMy:ITSPITFALLSANDPROMISESconsiderssomeoftheimplications,problemsandprom-isesofthenewplatformeconom?,andtriestomakesomerecommendationsforthefuture,suchasitcanbeseen.Butthedi?cultiesthatwearefacinghavesomeimpor-tantprecursors.e(probabl?apocr?phal)stor?istoldthatoneNedLudd,anapprenticeweaverfromLeicester,smashedtwoknittingframesafterhavingbeenabused–theabusema?havebeenawhippingb?hismaster,oritma?havebeenmockingb?local?ouths.But,inan?case,theapprentice’spetulancewaselevatedtomilitanc?andsacri?ceb?LordB?roninhis1816‘SongfortheLuddites’:Asthelibert?ladso’ertheseaBoughttheirfreedom,andcheapl?,withblood,Sowe,bo?s,weShalldie?ghtingorlivefree,AnddownwithallkingsbutKingLudd!B?ron,b?romanticisingtheLuddm?th,wasre?ectingawidel?sharedimpulsetodela?orimpede–b?violenceifnecessar?–thekindsofchangesthateconomistsnowcall‘creativedestruction’.B?1810,thefollowersof‘KingLudd’wereactiveinman?partsofEngland,soactiveinfactthattheBritishgovernmentdeplo?edmoretroopsagainstdomesticrevolutionthanitsenttofaceNapoleoninSpain.Oneimaginesananalogousmovement,sparkedb?oneUrLudd,about8,000?earsago,whensomeonestartedtopokeatthegroundwithasharpstick,fashioningaholeintheloosenedearthinwhichtoplantseeds.UrLuddislikel?6REVOLUTIONSANDDISRUPTIONtohavebrokenthestickandkickedtheseedsabout,hop-ingtofendo?themoveto?xedagricultureandpreservethehunter-gathererlifestyle.Allthecustoms,allthewaysofmakingalivingandalife,thatUrLudd–andNedLudd–knew,wereboundupinanolderwayofdoingthings.e‘oldway’wasverydi?erent,withhunter-gathererclansforUrandruralsemi-feudal?xedagricultureforNed,buttotheextentthattheythoughtviolencemightdelaychange,theywerehappytoriot.Ofcourse,real

violence–focusedande?ectivevio-lence–typicallyreliesontheactivecomplicityofthestate.ecurrentapostlesofKingLudd?ndreadyalliesinthehallsofCongress,Parliamentandespeciallyinlocalgov-ernment.Withhindsight,wecanseethattheopponentsoftheNeolithicandtheIndustrialRevolutionsweredoomedtofail.Butthosebattleswereneverreallywonandneverreallylost.Bothrevolutionscorrodedtheculturalandeco-nomichabitsthatpeoplehadtakenforgrantedforcentu-ries.Bothchangedlifefortheworse,atleastat?rstandforsomepeople.2Buttheyhappened,andbeforelong,lifestartedtogetbetter.2?uvalHararicalledtheswitchfromnomadictoagriculturallife‘history’sbiggestfraud’.Hearguedthat‘Ratherthanheraldinganeweraofeasyliving,theAgriculturalRevolutionleftfarmerswithlivesgenerallymoredi?cultandlesssatisfyingthanthoseofforagers.Hunter-gatherersspenttheirtimeinmorestimulatingandvariedways,andwerelessindangerofstarvationanddisease.eAgriculturalRevolutioncertainlyenlargedthesumtotaloffoodatthedisposalofhumankind,buttheextrafooddidnottranslateintoabetterdietormoreleisure.Rather,ittranslatedintopopu-lationexplosionsandpamperedelites.eaveragefarmerworkedharderthantheaverageforager,andgotaworsedietinreturn’(Harari2015:79).7THESHARINGECONOMy:ITSPITFALLSANDPROMISESenewrevolution,the‘platformrevolution’,ishavingits?rste?ectsrightnow,allaroundus.Itwillbeenor-mousl?destructive.Inman?wa?s,itwillchangelifefortheworse,atleastat?rstandforsomepeople.Butitisgoingtohappen,becausethiseconomicrevolution,likeitspredecessors,doesnotcarewhatwethinkofit.erevolutionishappeningbecausetheeconomiclogicisineluctable.epurposeofthisbookistoexplainwhatishappening,sothatwecanpositionourselvestoenjo?thebene?tssooner,andperhapsmitigatesomeoftheproblems.TransactioncostsandcommodifyingexcesscapacityIntheearl?1930s,whilejustbeginninghisworkasaneconomistatwhatisnowtheUniversit?ofDundee,RonaldCoasetravelledtotheUSandinterviewedanumberofcorporateCEOs.Coasefocusedonadeceptivel?simplequestion:economiststalkaboutthevalueofpricesanddecentralisedmarketsinorganisingcooperativehumanbehaviour,butifmarketsaresogreat,wh?arethere?rms?Afterall,noonecomeshomeattheendofahardda?andsa?s,‘Hol?cow,prices

wereinsuchabadmoodtoda?!’Instead,the?sa?thattheirboss,anactualhuman,wasinabadmood.Workersdonotreceivesignalsfromprices;the?getordersfrombosses.Firmsdevelopedinordertob?passthemarketmechanism,becauseusingpricesandmarketscanbe‘expensive’.ekindsofexpensethatCoase(1937)identi?edweredubbed‘transactioncosts’.8REVOLUTIONSANDDISRUPTIONPricesguideeconomicactivityatsomelevel,bothintermsoftheopportunitycostofcommodities–someoneelsewillpaymorethanthevalueoftheuseIenvisionforthething–andintermsofthe‘pro?ttest’,whichforces?rmstoconsiderwhethertheiractionsaresociallyvalu-able.Butatthelevelofday-to-dayactivity,pricesneverspeakdirectlytomostofus.ImaginethatIworkonaproductionline,addingtwoscrewstothewiringconnectorsonanappliance.IdonotgotoeBaytoselltheincompleteframe,althoughIcould.Whathappensinsteadisthattheconveyormovestheap-pliancechassistothenextpersonontheproductionline,whoattachesacoveronthemotorhousing,andsoon,downtheline.enextworkersrespondtotheordersoftheforeman,whodecideswhichstationonthelineeachpersonwilloccupythatday.Forthosewhofavourplanningoftheentireeconomy,ofcourse,thisseemstosuggestthatitisamistaketousemarketsatall;nationsshouldbeonebig?rm,asmanysocialistshavebeentellingusallalong.Butthatisnotright,either.Pricesandmarketprocessesreallydomakeitpossibletoorganiselargegroupsofpeopleacrossgreatdistances,andwithnocentraldirectionorpersonalknow-ledgeofwhatotherpeoplearedoing.Prices,thedivisionoflabourandmarketsystemsallowhumanstocooperatebetter,andtohavemorestu?touse,towear,toeat,ortoplaywiththananyothersystem.Withoutthedivisionoflabour,thecreationofwealthandprosperityislimited,andcanonlybeenjoyedbyelites.AsAdamSmith[1776](1981)famouslypointedout,‘divisionoflabourislimited9THESHARINGECONOMy:ITSPITFALLSANDPROMISESb?theextentofthemarket’,sothatthelargerthenumberofentitiestradinginamarkets?stem,thegreaterthedivi-sionoflabour,andthegreaterthewealthtobeshared.Owning,rentingandthecommodificationofexcesscapacityCoase’sobservationsabouttransactioncostsarevitall?important.AsIpreviousl?argued(Munger2015),ifCoasewerealivetoda?hewouldask,‘Wh?doweownthings,in-steadofsharingthemincommon,orrentingthem?’eremarkablethingisthatthis‘di?erentquestion’hasthesameanswer:transactioncosts.Toseewh?,rememberthattheconventionornormofexclusiveprivateownershipisanotablefeatureofhumandevelopment.Overthousandsof?ears,inm?riadsettings,theviewbecameacceptedthathavingan‘owner’ofapieceoflandoratoolora?rmwasbetterthanhavingthosethingsownedincommon.Wh?wouldthatbe?Afterall,Rousseau[1754](1984)famousl?argued:e?rstman,whoafterenclosingapieceofground,tookitintohisheadtosa?,thisismine;andfoundpeoplesimpleenoughtobelievehim,wastherealfounderofcivilsociet?.Howman?crimes,howman?wars,howman?murders,howman?misfortunesandhonours,mightnotan?onehavesavedthehumanspe-cies,whopullingupthestakesor?llinguptheditchesshouldhavecriedtohisfellows:Bewareoflisteningtothisimpostor;?ouarelost,if?ouforgetthatthefruits10REVOLUTIONSANDDISRUPTIONoftheearthbelongequallytousall,andtheearthitselfto?nobody[emphasisadded].Today,itisnowwidelyrecognisedthatRousseau’sroman-ticassessmentactuallyleadstocatastrophe,the‘tragedyofthecommons’.Buttheideaofsharingisattractive,bothbecauseit’scheaperandbecausehumannatureiscoop-erative.Itturnsoutthatprivatecooperativedivisionofaccesscanwork,andthatplatformscanmakeitpossible.Anownerofasecurepropertyrightcanplanforthefu-tureandstewardtheresourceorcapitalasset.erightofanownershipclaimalsogivestheownerresidualandpre-sumptiverightsofcontrol,givingbothincentivesandcap-acitytoensureactionistakenwhencontractsaresilentorincompletelyspeci?ed,orarebreachedbyotherparties.eownerorholderoftheseresidualrightscanthereforeactunilaterally,withoutaskingpermissionorhavingtonegotiatecontractsforuseoftheownedresource.3Uncertaintyandfrictioningettingthingsdonearecen-tralfactsoflifeinanyeconomy,soRousseauwasjustwrongabouttheimaginaryadvantagesofasystemwhere‘thefruitsoftheearthbelongtoall’.Privateownershipisheretostay,inanysystemthatworks.Butthedistributionandexchangeofcontractsinhowthingswillbeusedisadif-ferentquestion.Inthisbook,Iwillusetheword‘sharing’inthewaythathasbecomeincreasinglycommoninavariety3eimportanceoftheserights,andtheconventionofownership,hasbeenremarkedonvariouslybymanytheorists.Adiversesamplingwouldin-cludeHume(1740),Demsetz(1967),Hardin(1968),Williamson(1975,1985),Barzel(1989)andLibecap(1989).11THESHARINGECONOMy:ITSPITFALLSANDPROMISESofapplicationsandnewbusinessessuchasUber,AirbnbandBlaBlaCar.eunderl?ingassetbeingshared,throughrentingorsomeotherprocess,isprivatel?owned,andtheinterestsoftheresidualrightsholderareoperatinginthebackground.Butthereductionintransactioncostsimpliedb?thenews?stemfostersthecommodi?cation

ofexcesscap-acit?,tothepointwheretheuse

oftheassetcanbeboughtandsoldseparatel?fromtheunderl?ingrightsofownership.Ine?ect,asever??rst-?earlawstudentlearnsinthe‘IntroductiontoContracts’class,ownershipimpliesabun-dleofrights.Someoftheserightscanbeshared,orrentedout,andothersareretainedb?theprimar?residualclaimsowner.atiswh?havingajoband‘rentingout’one’sla-bourisnotslaver?;thatiswh?Igettosta?inanAirbnbfortwonightsandhaveexclusiveuseofthe?atduringthattime,buttheownerretainsalltherights(andresponsibil-ities)oftheresidualclaimsholder.So,wh?doweown,ratherthanrent?eansweristhat,untilrecentl?,rentingout–sharingthe‘temporar?userights’portionofthepropert?bundle–hasbeenassoci-atedwithtransactioncoststhatoverwhelmtherevenuethatcouldbeearnedthroughcommodi?cation.Butthatisnotobviousl?,orde?nitionall?,true.e‘sharingecon-om?’isawideassortmentofapparentl?di?erentwa?sofpartitioningshort-termownership;thesharedfeatureofthesemarketsisthatthe?enablepro?tablemeansofcom-modif?ingexcesscapacit?thatuntilnowcouldonl?bewasted,oratbeststored.echoiceofrentingorowning,oroccup?ingsomeh?-bridform,isofcoursenotsolel?drivenb?generalmarket12REVOLUTIONSANDDISRUPTIONconditions.emostimportanteconomicelementof‘dur-ables’istime.atis,wedon’twantthethingitselfasmuchaswewantthestreamofservicesorvalueweassociatewiththething.Idon’twantahammer;whatIwantistohavethesenailsdrivenintoawallinjusttheplaceIwantandatwhatevertimeImightwantit.Asaresult,Iownthehammermyselfandkeepitinatoolbox,takingupspaceinmycloset.Onabroaderscale,IwantlivingspaceandIwantsub-stantialcontroloverthatspace’ssecurity,temperature,lightingandlocation.Icanobtainthosethingsbyowningthespace;alternatively,Icanobtainthosethingsbyrent-ing,signingacontractthatleavesresidualcontrolrights(andresponsibilityfornormalrepairsandupkeep)inthehandsofthelandlord.erelativepreferenceforrentingversusowning‘hous-ingservices’variesacrosspeopleandovertime.Butthecost,includingthetransactioncost,ofeachofthetwochoicesalsomatters.e