![]() ![]() We further propose corresponding governance strategy. Based on the aforementioned, this article discusses the source of negative externalities in the sharing economy to explore which economic features constitute the source of negative externalities and whether specific patterns exacerbate these negative externalities. Therefore, identifying sources of negative externality may be effective in determining entry points for governance of the sharing economy. When externalities exist, the allocation of resources cannot reach Pareto optimality. Pigou (1962) believes that externality is the inevitable result of market operations. The sharing economy situation fits well with the externality theory. ![]() ![]() The relative lag in theoretical research has also caused difficulties for relevant departments in the actual governance of the industry. Main reasons for this include the lack of a clear understanding of the emergence of various problems in the sharing economy and the weak pertinence of proposed governance methods. However, traditional governance methods produce difficulties for sharing economy as a new, effective economic form. Many studies have begun to focus on governance issues regarding the sharing economy and have proposed various suggested governance methods such as multiple governance (People’s Forum questionnaire survey center, 2017), collaborative governance ( Tang, 2017), mixed supervision ( Tang, 2015), response-type regulation ( Peng, 2016) and so on. For example, in terms of sharing trips, Singapore and other countries recognize the legitimacy of vehicles such as Uber, but under strict regulations France and others investigate online car rental services as illegal businesses in California and Colorado in the USA and Washington, DC the legalization of online car rental services has already been achieved. Recently, countries around the world have begun to actively respond to the negative effects of the sharing economy. However, it has also brought some negative effects, such as shared bikes occupying sidewalks, drivers violating regulations, price increases and tenants destroying homes in short-term rentals. ![]() The sharing economy has played an important role in improving the allocation efficiency and user value of social resources. The 2017 Sharing Economy Development Report released by the China Electronic Commerce Research Center pointed out that in 2017, China’s sharing economy was more than 5tn, with a growth rate of more than 40 per cent since 2016. Globally, tens of thousands of various types of sharing economy enterprises exist, affecting people’s lives and consumption patterns in various fields. The sharing economy has been generated under the background of overcapacity, referring to a new model in which internet companies use algorithms and data to mobilize redundant resources in the market, solve asymmetric market information and improve transaction efficiency. The global success of business models represented by Airbnb and Uber have opened various resources for sharing, influencing the rise of sharing economy. The full terms of this licence may be seen at Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Published in International Journal of Crowd Science. Copyright © 2018, Wenjun Jing and Baowen Sun. ![]()
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