Question 1

Highly _______ markets are especially ripe for rollup in electronic marketplaces

Accepted Answer

fragmented

Question 2

Social media profiles can also be used to fight online fraud.

Accepted Answer

Social media profiles can be used to verify the identity of individuals and detect fraudulent activity online. By analyzing social media data, individuals and businesses can identify suspicious behavior and patterns that may indicate fraud. Additionally, social media can be used to raise awareness about common types of online fraud and share tips for avoiding scams.

Question 3

Rent the Runway and Chegg have chosen to purchase their own inventory for rental to customers, rather than relying on inventory provided by participating citizens suppliers. This incurs an additional cost on these firms. Why would they opt to use this model if startup costs are going to be more expensive?

Accepted Answer

For some marketplaces, end users simply can't be relied on to consistently manage inventory and logistics. In these cases, successful "collaborative consumption" efforts own inventory to ensure quality and gain more control over the customer experience. Rent the Runway meticulously oversees its dress inventory, packing product for delivery, running a massive in-house garment cleaning effort, and retiring dresses that are noticeably worn. The goal is to ensure that an experience with the firm will bring customers a "Cinderella moment" filled with delight, rather than disappointment. While some start-ups have attempted to allow women to rent dresses to others, none has achieved anything close to the scale of Rent the Runway's four million members. For the same reason Chegg oversees textbook inventory for the timely delivery students demand. A service where college students rented textbooks to others could never consistently deliver on quality.

Question 4

Which of the following is *not* true regarding the competitive dynamics of most sharing economy marketplaces?
A) Ratings represent a switching cost built over time by early participants in sharing economy marketplaces.
B) Late-movers have a substantial advantage in this market since inventory should be cheaper to acquire for those firms that have entered markets more recently.
C) Network effects should grow over time, favoring firms that got a successful, early start over rivals who arrived late doing the same thing.
D) These are two-sided markets.
E) None of the above - all statements are true.

Accepted Answer

Late-movers typically face higher entry costs and struggle to establish a foothold in the market due to the strong network effects and switching costs that have developed over time. Therefore, late-movers do not have a substantial advantage in the sharing economy.

Question 5

What are some concerns regulators have over the sharing economy using independent contractors and not full time employees?

Accepted Answer

The answer of What are some concerns regulators have over...

Question 6

If eBay and Craigslist are included, some 40 percent of the US and Canadian population have participated in the sharing economy.

Accepted Answer

The statement is true according to a study by PwC, which included eBay and Craigslist in their definition of the sharing economy.

Question 7

Crowdsourcing has a number of benefits, but problems include the potential for bias and discrimination. How can crowdsourced ratings also reflect the crowd's bias and reinforce discrimination.

Accepted Answer

The answer of Crowdsourcing has a number of benefits, but...

Question 8

Prof. Juliet Schor says that businesses considered to be part of the _________________ can involve the recirculation of goods, increased utilization of durable assets, exchange of services, or the sharing of productive assets

Accepted Answer

The answer of Prof. Juliet Schor says that businesses considered...

Question 9

While some fear Airbnb is taking jobs away from hotel chains, the firm is also creating jobs and driving demand for a whole array of platform-enhancing services, including photographers, key-exchange coordinators, in-home chefs, house cleaners, and ride-sharing services.

Accepted Answer

The answer of While some fear Airbnb is taking jobs...

Question 10

Uber prices services according to demand. This allows the company to increase rates during peak periods in order to attract more potential suppliers into the market to meet demand.

Accepted Answer

Uber's surge pricing model increases prices during peak periods in order to incentivize more drivers to come onto the road and meet the increased demand. This allows Uber to balance supply and demand and ensure that riders can get a ride when they need it, even during busy times.

Question 11

Payment continues to represent a barrier to widespread adoption of the sharing economy, since many consumers feel uncomfortable exchanging cash or financial information with strangers.

Accepted Answer

The answer of Payment continues to represent a barrier to...

Question 12

While unions and hotel chains might not like Airbnb and feel threatened by its offerings, Airbnb is legal in nearly every market worldwide since private citizens are fully empowered to rent property that they own.

Accepted Answer

Airbnb's legality varies by location, with some cities and countries imposing restrictions or regulations on short-term rentals.

Question 13

Firms classified as being part of the sharing economy and collaborative consumption are still considered too risky to attract substantial venture capital investment.

Accepted Answer

Firms in the sharing economy and collaborative consumption have been attracting substantial venture capital investment in recent years, indicating a growing interest and confidence in these business models. Many well-known companies like Airbnb, Uber, and Lyft have successfully raised billions of dollars in venture capital funding.

Question 14

Why were fashion firms initially threatened by Rent the Runway and why has their position evolved over time?

Accepted Answer

The answer of Why were fashion firms initially threatened by...

Question 15

Firms in the so-called "sharing economy" fuel more efficient matching of ___________ and __________, lower costs, enable more efficient resource use, and provide a level of reach and services heretofore unavailable

Accepted Answer

The answer of Firms in the so-called "sharing economy" fuel...

Question 16

Citizen suppliers in the sharing economy may find their _______ costs increase due to increased product use and an increase in perceived risk over time.

Accepted Answer

The answer of Citizen suppliers in the sharing economy may...

Question 17

Why are sharing economy marketplaces so attractive to consumers?

Accepted Answer

The answer of Why are sharing economy marketplaces so attractive...

Question 18

Given examples of firms in the sharing economy that focus on the following categories: goods, transportation, and capital provision. List markets challenged in each of these areas.

Accepted Answer

The answer of Given examples of firms in the sharing...

Question 19

Which of the following is *not* an example of larger, conventional firms working with sharing economy startups?
A) Apple's purchase of Beats to give new musical artists more exposure.
B) Condé Nast's investment in Rent the Runway.
C) Google's investment in Uber.
D) Walgreens' partnership with TaskRabbit.
E) W Hotel partnering with Desks Near Me.

Accepted Answer

Apple's purchase of Beats was not related to the sharing economy or working with a sharing economy startup. It was focused on expanding Apple's presence in the music industry. The other choices all involve larger firms working with sharing economy startups to explore new business models and partnerships.

Question 20

What is the difference between collaborative consumption firms Zilok and Chegg.
A) Zilok has gone public, Chegg hasn't.
B) Zilok is a service where a person comes to your home to complete a task, Chegg is a rental firm.
C) Zilok provides inventory provided by participating 'citizen suppliers', Chegg owns its own inventory.
D) Zilok is the European equivalent of Chegg.
E) Zilok was purchased by Chegg underscoring the 'winner take all' dynamics of these markets.

Accepted Answer

The main difference between Zilok and Chegg is that Zilok provides inventory provided by participating 'citizen suppliers', while Chegg owns its own inventory.

Quiz 10: The Sharing Economy, Collaborative Consumption, and Creating More Efficient Markets Through Technology