On the Efficiency of Sharing Economy Networks

Abstract

Exchange of resources (or, services) over sharing economy networks is attracting increasing interest. Despite their broad applicability, many fundamental questions about their properties remain unanswered. We consider a general sharing economy model and analyze the dynamic interactions of nodes under three different approaches in a stochastic environment. First, we study a centrally designed allocation policy that yields the fair resource each node should receive based on the resources it offers to others. Next, we consider a competitive market where each node determines its allocation strategy so as to maximize the service it receives in return, and a coalitional game model where nodes may coordinate their policies. We prove there is a unique equilibrium exchange allocation for both settings, which also coincides with the central fair allocation. We also characterize the properties of the long-term equilibrium allocations, and analyze their dependence on the network graph. Finally, a dynamic decentralized algorithm is introduced that achieves this desirable operation point with minimal information exchange. The proposed policy is the natural reference point to the various mechanisms that are considered for motivating node collaboration in such networked sharing economy markets.