Katharina Dowling - Consumer Behavior and Behavioral Biases in the Sharing Economy

Series: Electronic Commerce & Digital Markets

Volume: 11

Editor: Prof. Dr. Martin Spann

ISSN: 2199-7608

Ludwig-Maximilians-Universitt Mnchen

Munich School of Management

Institute of Electronic Commerce and Digital Markets

Geschwister-Scholl-Platz 1

80539 Munich

Germany

www.ecm.bwl.lmu.de

Imprint

Bibliographic information is published by Deutsche Nationalbibliothek.

The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the internet at www.dnb.de.

Author:

Dr. oec. publ. Katharina Dowling

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Production and Publishing:

BoD Books on Demand GmbH, Norderstedt

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Internet: www.bod.de

Dissertation 2019

LMU Munich/Ludwig-Maximilians-Universitt Mnchen

Reference Number/Kennziffer: D 19

Foreword by Prof. Dr. Martin Spann

1st Edition 2019

All rights reserved.

Copyright 2019 Dr. Katharina Dowling

No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission by the copyright holder.

Registered and/or industrial names, trade names, trade descriptions etc. cited in this publication are part of the law for trademark protection and may not be used free in any form or by any means even if this is not specifically marked.

Cover design & layout: Dr. Katharina Dowling

Cover image: claudenakagawa / iStock.com

Printed on FSC-certified paper.

ISSN 2199-7608

ISBN 9-783750-472433

The so-called Sharing Economy is characterized by platform-based business models that match providers of various types of products such as transportation, housing, workspace or durable-goods lending with respective demand (e.g., consumers). Driven by the vastly reduced transaction costs in digital environments, Sharing Economy business models have substantial implications for the economy as well as society at large: They challenge incumbent suppliers in their industries (e.g., Taxi services or hotels), affect workers (e.g., their skills, income, and ways of working), as well as offer consumers additional choices (e.g., using car sharing instead of buying a car). Therefore, the Sharing Economy has already gained considerable attention from business, economic, and social science research.

However, previous research has not sufficiently studied yet, how consumers react to the additional choices provided in the Sharing Economy. Deciding, for example, on whether to buy a car or use car sharing services requires an estimation of future usage behavior and market conditions. Thus, the increased complexity of these choices may overwhelm consumers and entail systematic deviations from rational decision-making, i.e., behavioral biases.

Katharina Dowlings dissertation aims at analyzing such behavioral biases in consumers choices in the Sharing Economy. One particular focus is on a consumers decision between a flat-rate and a pay-per-use tariff, which is frequently required in this context. In order to achieve its objectives, the dissertation provides a rich theoretical background combining theories from marketing and behavioral economics in two extensive review papers. Two additional studies are empirical in nature: A field study using a rich data set from the car sharing industry as well as an experimental study using methods from behavioral economics to identify a key driver of tariff-choice biases.

Katharina Dowlings dissertation is an important contribution to the theory and understanding of consumer behavior in the Sharing Economy. She successfully draws on interdisciplinary research and complementary empirical methodology to derive highly relevant managerial implications. I wish that marketing research and practice will benefit from the insights of this dissertation.

Munich, September, 2019

Martin Spann

This dissertation would not have been possible without the help of many people.

First, I would like to sincerely thank my advisor, Martin Spann. Your enthusiasm for academic research and topics related to electronic commerce have inspired me from the start. Thank you for your invaluable feedback and guidance at all times, your trust and support, and the countless opportunities. I would also like to thank my second advisor, Thomas Hess, for your time in reviewing this dissertation and for your helpful comments.

Moreover, I am very grateful to my co-authors, Daniel Guhl, Daniel Klapper, Puneet Manchanda, Lucas Stich, and Narine Yegoryan. It was a great pleasure to collaborate with such inspiring and talented people. I am very proud of the work we have accomplished.

Furthermore, I would like to thank my colleagues (and friends) at the Institute of Electronic Commerce and Digital Markets: Camila Back, Walli Broch, Gbor Darvasi, Andrea Dechant, Alice Harter, Andreas Heusler, Lena Hoeck, Philipp Ngelein, Kamilla Ptzold, Alexander Pfaff, David Prakash, and Emanuel Schuster. I tremendously enjoyed working with you all. I will miss the fun times we shared in the office and at conferences and other social events. I am also grateful to the student research assistants at the Institute of Electronic Commerce and Digital Markets for providing excellent research assistance.

I would also like to thank all members of the Collaborative Research Center Transregio Rationality and Competition for interesting presentations, helpful comments, and fruitful discussions.

Finally, I would like to extend a big thank you to my family and friends, who accompanied me on this journey. Thank you for your interest in my work, your moral support, and welcome distractions. Most of all, I would like to express my deepest gratitude to my husband Philip for your constant support, inspiring ideas, unshakeable optimism, and for always believing in me.

Munich, September, 2019

Katharina Dowling

CONSUMER BEHAVIOR AND BEHAVIORAL BIASES

IN THE SHARING ECONOMY

Inaugural-Dissertation

zur Erlangung des Grades Doctor oeconomiae publicae (Dr. oec. publ.)

an der Ludwig-Maximilians-Universitt Mnchen

vorgelegt von

Katharina Dowling

Jahr: 2019

Referent: Prof. Dr. Martin Spann

Korreferent: Prof. Dr. Thomas Hess

Promotionsabschlussberatung: 24.07.2019

Sharing business models have been rapidly growing over the past decade (Burtch, Carnahan, & Greenwood, 2018; Proserpio, Xu, & Zervas, 2018). They are referred to as the Sharing Economy, collaborative consumption, on-demand economy, peer economy, or gig economy (Narasimhan et al., 2018; Parente, Geleilate, & Rong, 2018). Despite the various names, the general idea behind these platforms is that they offer consumers temporary access to (underutilized) products instead of ownership, which is mediated by the Internet (Belk, 2014). In contrast to earlier Internet-based platforms such as eBay, sharing platforms focus on facilitating recurring short-term rental or service provision, rather than on a resale in which the asset ownership is transferred (Fraiberger & Sundararajan, 2017).

While the concept of sharing is not new, the development of sharing platforms as they exist today only accelerated with the technological advancement of network technology and the mass adoption of mobile devices and apps, which reduced transaction costs and simplified the matching of buyers and sellers (Horton & Zeckhauser, 2016).