□ The sharing economy is expected to contribute to the enhancement of social welfare with its wide range of benefits, including creation of new transactions and promotional and market testing opportunities, if risk factors such as crowding out of existing transactions and transaction and social risks can be properly controlled. Accordingly, an institutional framework is needed to support the stable growth of the sharing economy and the unique characteristics of non-professional, peer-to-peer transactions should be reflected in tandem with regulatory equity between existing and sharing economy suppliers. For this, transaction volume-based regulations are recommended. Furthermore, to secure regulatory effectiveness and to alleviate transaction risks, the pertinent obligations must be imposed on sharing platforms. - There is increasing demand for in-depth analysis of and policy response to the sharing economy which is growing fast on the back of technological advances. - Within the concept of the sharing economy, idle assets have great significance. The sharing economy basically involves transactions between nonprofessional peers. - Primary benefits expected from the sharing economy are creation of new transactions and resulting improvements in the welfare of sharing economy participants. - Businesses participating in the sharing economy can also expect promotional and market testing effects. - Other expected benefits include vitalization of local economy and reduction in environmental costs. - The sharing economy could crowd out some existing transactions that provide similar services. - The crowding out of existing transactions will exacerbate when regulations are applied unfairly to suppliers from existing and sharing businesses. - The sharing economy encompasses several transaction risks including information asymmetry, uncertainty in ex-post handling and weak trust in platforms. - Negative external effects could be triggered, marring social safety. - In laying the institutional framework to support the stable growth of the sharing economy, the government must consider both the economy’s unique characteristics and regulatory equity. - Transaction volume-based regulations are recommended for the sharing economy. - To strengthen the effectiveness of transaction volume-based regulations, certain obligations must be imposed on platforms. - As for transaction risks, government policies need to play a supplementary role while placing its focus on sharing platforms.

This study closely analyzes key issues of the sharing economy, and based on the results, implications are presented for government policies to support its stable growth. In particular, theoretical and empirical analyses of the benefits and concerns of the sharing economy were conducted to derive policy and institutional measures that could help to achieve the expected benefits and respond appropriately to any concerns. This monograph consist of four chapters. Chapter 1 first establishes the concept of the sharing economy, discusses its overall status and economic issues, and then analyzes how its benefits and concerns are realized in Korea by conducting a extensive survey regarding the awareness of and experience with the sharing economy. Chapter 2 theoretically analyzes the economic effects of the sharing economy and derives a general institutional framework. Next, Chapters 3 and 4 examine in detail accommodation sharing and crowdfunding respectively. In each chapter, an empirical analysis is conducted focusing on the most prominent concern in respective sector―in the case of accommodation sharing, crowding out of the existing industry and in the case of crowdfunding, transactions risks including weak trust in platforms―and desirable policy directions are derived based on the comparison analysis of institutionalization cases of major countries. The main results and policy implications of this study are as follows. The proliferation of the sharing economy is a global trend, and is accompanied by diverse expected benefits such as creation of new transactions, promotional and market testing opportunities, vitalization of local economy, reduction in environmental costs and so on. However, there are also risk factors, including the crowding out of existing transactions and transaction and social risks. The sharing economy is expected to contribute to the enhancement of social welfare if risk factors can be properly controlled, so the government must lay the institutional foundations to support its stable growth. This will entail a new approach that takes into account its uniqueness, and each sector requires specific action plans due to differences in development status, prospect and key issues. This study concludes that regulations are recommended to be linked to the volume of transactions for the sharing economy when the unique characteristics of non-professional, peer-to-peer transactions are considered in tandem with regulatory equity between existing and sharing economy suppliers. In other words, a transaction limit should be set and those who exceed the limit should be categorized as ‘professional, regular operators,’ and be subject to traditional supplier regulations while those who do not should be categorized as ‘non-professional, temporary operators’ and be subject to eased regulations. However, the enforcement of transaction volume-based regulations involves difficulties. To secure regulatory effectiveness, pertinent obligations including information reporting requirements must be imposed on sharing platforms, which is also necessary to properly respond to transaction risks.

This study examines the information asymmetry of the platform economy in the context of the sharing economy. In particular, the focus was placed on Airbnb's superhost policy, and the effects of the platform's reputation badge (quality certification) on transaction volume and moral hazards were analyzed and the effectiveness of various trust-building market-mechanisms was compared. By combining the database of Inside Airbnb and AirDNA, an analysis was conducted of the data on New York City from August 2016 to December 2018 (from Airbnb webpage). Superhost badges have been shown to have a positive impact on performance―providing incentives for hosts to maintain and improve service quality. However, incentive for reputation milking was also found. Indeed, when selected as a superhost, the number of listings increased while service quality and guest satisfaction gradually decreased. This shows the imperfections and limitations of market mechanisms. However, since the moral hazard is not severe, it can be inferred that self-regulation is still effective under a proper design. Besides, the effects of signaling devices were found to differ depending on whether the guest or the host bears the burden of authentication. The results suggest that it is necessary to discuss the optimal design for a trust building mechanism before discussing government intervention in the matter of information asymmetry.

ㅁ Date　　　　 : 19-20 November 2015 ㅁ Venue　　　 : 2F, Orchid Room, Grand InterContinental Seoul Parnas ㅁ Jointly Hosted: MOSF,KDI Letter of Invitation The world today is witnessing a rapid and undeniable dissemination of the sharing economy; trading of idle assets through mobile platforms has attracted broad attention spanning across accommodation, vehicles, financing, space and talent acquisition, among others. For Korea, in particular, with its growing number of smartphone users and single-member households, this phenomenon will make signigicant headway. Accordingly, successful stabilization as a new business model within the existing system requires a customized regulation design and institutional footing that well reflect the unique characteristics of the sharing economy, together with concerted efforts to solve diverse trade-related issues such as conflicts involving incumbent operators, taxation and security. In recognition, the Ministry of Strategy and Finance and Korea Development Institute will host the 2015 International Forum on Service Sector Advancement entitled “Dissemination of the Sharing Economy: Issues and Solutions.” Among the attendees are officials from international organizations including the OECD and EC, and experts and specialists from ‘the hub of the sharing economy,’ the City and County of San Francisco and numerous global enterprises. Discussions will be held on key issues, general future policy agendas and the stable dissemination of the sharing economy in Korea as well as exchanges on the experiences of advanced economies with policy implications. The forum will present the ideal platform to discuss and share knowledge and ideas. We thank you for your consideration and warmly invite you to make this timely event a great success. November 2015 Joon-Kyung Kim President, Korea Development Institute program Day 1. Nov. 19 09:00~09:30　 Registration & Networking 09:30~09:45　 Opening Ceremony 　　　　　　　Opening Remarks 　　　　　　　　Hyung-hwan Joo The 1st Vice Minister, Ministry of Strategy and Finance (MOSF) 　　　　　　　Welcoming Remarks 　　　　　　　　Joon-Kyung Kim President, Korea Development Institute (KDI) 09:45~12:00　 Session 1. Perspectives on the Sharing Economy 　　　　　　　Moderator 　　　　　　　　Bernardo Hernandez Bataller Representative of Consumers European Economic and Social Committee 　　　　　　　Speakers 　　　　　　　San Francisco and its Role in the Emergence of the Sharing Economy: History and Lessons 　　　　　　　　Mark Chandler Director, Mayor's Office of International Trade and Commerce, City and County of 　　　　　　　　San Francisco 　　　　　　　The Rise of Online Platforms: Trends and Issues 　　　　　　　　David Gierten Economist / Digital Analyst, Directorate for Science, Technology and Industry, OECD 　　　　　　　Collaborative or Participatory Consumption: A Sustainability Model for the 21st Century in Europe 　　　　　　　　Bernardo Hernandez Bataller Representative of Consumers, European Economic and Social Committee 　　　　　　　Welfare Effects and Policy Implications of the Sharing Economy: An Economic Perspective 　　　　　　　　Sunjoo Hwang Fellow, KDI 　　　　　　　Discussants 　　　　　　　　Hoseung Lee Director General for Policy Coordination, MOSF 　　　　　　　　Kyung Sun Choi Editorial Writer, Mail Business Newspaper 12:00~13:30　 Luncheon 13:30~15:30　 Session 2. Car Sharing: Issues and Solutions 　　　　　　　Moderator 　　　　　　　　Mark Chase Founding Team Member, Zipcar / Lecturer, Tufts University 　　　　　　　Speakers 　　　　　　　　Car Sharing in Korea: The Current State and Issues 　　　　　　　　Yoon Cho Professor, KDI School of Public Policy and Management 　　　　　　　　The Dollars and Sense of Commercial Sharing: Appealing to Consumer Rationality 　　　　　　　　Cait Lamberton Associate Professor, University of Pittsburgh 　　　　　　　　Car-Sharing: Emerging Trends and Best Practices 　　　　　　　　Mark Chase Founding Team Member, Zipcar / Lecturer, Tufts University 　　　　　　　Discussants 　　　　　　　　Young-hwan Cha Director General for Growth Strategy, MOSF 　　　　　　　　Seungho Shin Executive director of Socar 15:30~15:45　 Coffee Break 15:45~17:45　 Session 3. Accommodation Sharing: Issues and Solutions 　　　　　　　Moderator 　　　　　　　　John W. Byers Professor, Boston University 　　　　　　　Speakers 　　　　　　　　Airbnb’s Experience (will be updated) 　　　　　　　　Julian Persaud Regional Director APAC, Airbnb 　　　　　　　　Measuring the Impacts of Accommodation Sharing on the Hospitality Industry: Evidence 　　　　　　　　and Implications 　　　　　　　　John W. Byers Professor, Boston University 　　　　　　　　Accommodation Sharing in Korea: The Current State and Issues 　　　　　　　　Yoon Cho Professor, KDI School of Public Policy and Management 　　　　　　　Discussants 　　　　　　　　Jong-Il You Professor, KDI School of Public Policy and Management 　　　　　　　　Cait Lamberton Associate Professor, University of Pittsburgh Day 2. Nov. 20 09:30~11:00　 Session 4. Crowdfunding: Issues and Solutions 　　　　　　　Moderator 　　　　　　　　Kris Boschmans Policy Analyst, Centre for Entrepreneurship, Local Development and SMEs, OECD 　　　　　　　Speakers 　　　　　　　　Crowdfunding: The Current State and Issues 　　　　　　　　Minjung Kim Fellow, KDI 　　　　　　　　The Dynamics of Crowdfunding: Evidence from Kickstarter 　　　　　　　　Venkat Kuppuswamy Assistant Professor, University of North Carolina at Chapel Hill 　　　　　　　　Crowdfunding: Recent Developments and Policy Recommendations 　　　　　　　　Kris Boschmans Policy Analyst, Centre for Entrepreneurship, Local Development and SMEs, OECD 　　　　　　　Discussants 　　　　　　　　Hye-Hwal Seong Professor, Inha University School of Law 　　　　　　　　Hyun-Uk Shin CEO & Founder, POPFUNDING, Inc 11:00~11:15　 Coffee Break 11:15~12:45　 Session 5. Workers' Status in the Sharing Economy 　　　　　　　Moderator 　　　　　　　　Brishen Rogers Associate Professor, Temple University Beasley School of Law 　　　　　　　Speakers 　　　　　　　　Challenges of the Sharing Economy at the Local Government Level 　　　　　　　　Jane Kim Supervisor, City and County of San Francisco 　　　　　　　　Labor Standards and Other Regulatory Challenges in the ‘Sharing Economy' 　　　　　　　　Brishen Rogers Associate Professor, Temple University Beasley School of Law 　　　　　　　　Labor and Skill Sharing in Korea 　　　　　　　　Hwa Ryung Lee Fellow, KDI 　　　　　　　Discussants 　　　　　　　　Sang Yeob Han Founder, Wisdome 　　　　　　　　ByoungSoon Moon Consultant, LG Economic Research Institute 12:45~13:30　 Luncheon