Year of selection 2017
Institution Universita Commerciale Luigi Bocconi
Joint Research Initiative
Over the past decade, a new sharing economy has arisen, one in which people use online technologies to access goods and resources provided by their peers. Spurred with the growth of Uber and Airbnb, for instance, such businesses have disrupted a number of industries, profoundly changing the face of urban markets in particular. As always with game-changing innovation, along with substantial benefits and opportunities, comes unprecedented challenges and risks. In a Joint Research Initiative (JRI) with AXA Italy, Prof. Marco Percoco, associate professor of transport and urban economics at Università Bocconi in Milan, aims to study the impact of innovative and collaborative business models on consumers’ behaviour and on the structure of existing markets for similar services. The project focuses on the fastest-growing and most affected sectors: transportation and housing markets. The project’s overarching goal is to provide policy briefs with the geography of regulatory frameworks and of public actions to be undertaken.
« These “new markets” are usually characterized by rental of short duration and high turnover of clients, features influencing significantly risk perception, risk taking and even risk sharing and allocation between clients and suppliers of services », Percoco analyses. « This is why we aim to investigate the change in the consumer behaviour induced by the shift from ownership to rental arrangements ». « For instance, we want to see if people drive differently when they have strangers in their cars, or when they are driving a car that is not their own ». « We don’t expect to find linear results. Cultural differences will play a role. We’ll have to explore this as well », he points out. As a geographer trained as an economist, Percoco is not « space-blind » as he puts it. The research program will analyse the impact of the sharing economy on the geography of markets of taxis, car accidents, housing rents and prices. « Trust and social interactions differ from one place to the next and they play a central role as a phenomena able to mitigate certain types of risks », he continues. « This is particularly relevant with collaborative businesses as systems of recommendation and reviewing are believed to play a crucial role in their success ».
Adapting to new trends of markets and consumer behaviour
« Our partnership with AXA is absolutely crucial for this project », Percoco stresses. « To study smart cities, you need to deal with enormous amounts of anonymized data, and that’s where AXA comes in. Up-to-date figures and datasets will help the team of academics anchor their investigation in reality, assisting specifically with the second and third stages of the research program. The project is indeed divided into three consecutive steps, the first of which is to interpret the “sharing economy” from a behavioural perspective. Then, by using a novel dataset on driving styles, the team seeks to adapt the behavioral framework to real-world data. « Finally, by using detailed micro data, we will study how traditional sectors are reacting to the competition of multisided platforms. The aim here is to enhance our understanding of the industrial dynamics and the size and shape of traditional vs new markets », Percoco concludes.
By taking into account both the geographical and behavioural aspect of the rise of the sharing economy, this collaborative project between Prof. Marco Percoco and AXA holds great potential when it comes to drawing a prospect of the riskiness of future urban societies. In jointly addressing this research question, the project has every chance to enlighten policy and decision-makers on the the resilience of urban markets and on the geography of this resilience.