Sustaining and sharing: Optimal decisions in product-sharing platforms with green services

Abstract

While some researchers consider the traditional product-sharing model in which the platform only focuses on its profits, this study considers a green-sharing mode, where the platform focuses on its profits and provides green services to consumers. We analyze the optimization problems on the pricing scheme under the traditional mode and on the pricing scheme and effort for offering green services under the green mode. We investigate how the green service implementation affects stakeholders and find that providers are always better off under the green mode. When consumers prefer the product-sharing model, the green mode can generate higher profits given that 1) the lower difference and larger cost coefficient or 2) the higher difference and smaller cost coefficient, and the traditional mode increases consumer surplus if the difference is sufficiently high. When consumers prefer the baseline model, whether the green mode brings higher profits depends on the relationship between the sensitivity degree of consumers and discount ratio, and consumers are better off under the traditional mode if the difference and discount ratio are higher. Furthermore, we establish a contract in which all stakeholders are better off under the green mode when consumers have green preferences.