We report experimental and quasi-experimental evidence from a “sharing economy” marketplace that transitioned from decentralized to centralized pricing. Centralized pricing increased the utilization of providers’ assets, resulting in higher revenues but also higher transaction costs. Providers who were barred from accessing the price system made nonprice adjustments, including reducing the availability of their assets, canceling booked transactions, and exiting the market. Providers who retained partial pricing control reacted substantially less but experienced similar revenue increases. We highlight the challenges of implementing centralized pricing and assessing its welfare effects. We show that partial control can mitigate these challenges, allowing providers to express their private and heterogeneous preferences while maintaining the benefits of centralization. This paper was accepted by Gabriel Weintraub, revenue management and market analytics. Funding: S. Jagabathula was funded in part by the Division of Civil, Mechanical, and Manufacturing Innovation [Grant 1454310]. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2023.4789 .

New Internet-based “sharing-economy” markets enable consumer-owners to rent out their durable goods to nonowners. We model such markets and explore their equilibria both in the short run, in which ownership decisions are fixed, and in the long run, in which ownership decisions can be changed. We find that sharing-economy markets always expand consumption and increase surplus, but may increase or decrease ownership. Regardless, ownership is decoupled from individual preferences in the long run, as the rental rates and the purchase prices of goods become equal. If there are costs of bringing unused capacity to the market, they are partially passed through, creating a bias toward ownership. To test our theoretical work empirically, we conduct a survey of consumers, finding broad support for our modeling assumptions. The survey also allows us to offer a partial decomposition of the bring-to-market costs, based on attributes that make a good more or less amenable to being shared. This paper was accepted by Joshua Gans, business strategy.