The Impact of Shared Economy on the Business Model: From Decentralization to Recentralization

Abstract

With the rapid development of shared economy in recent years, the traditional business model has displayed a trend of “decentralization”. The position of traditional business centers weakened, and the importance of individuals was emphasized. However, shared economy platforms have three characteristics: cost regression, network externalities and switching cost between platforms, impelling the business model to gradually display a new trend of “recentralization”. By analyzing the characteristics, advantages and disadvantages of shared economy, this paper summarizes the mechanism behind the trend of shared economy’s changing from “decentralization” to “recentralization”, and gives policy suggestions on the credit-scoring system, laws and regulations, and the supervision.