Peer-to-peer carsharing as an effective way to reduce car overuse

We study the market of peer-to-peer carsharing, a market where owners rent their cars out to nonowners in exchange for a price. In a model where individuals take into account the effects of their mobility decisions on the environment, but this green sensitivity is heterogeneously distributed across them, we show that the introduction of peer-to-peer carsharing may lead to both an increase or a decrease in total car usage (and thereby emissions), but is likely to yield more beneficial effects in less green populations or when the distribution of green sensitivity is more polarized. We consider the possibility that individuals suffer from present bias and therefore end up using the car more than they originally intended. We show that peer-to-peer carsharing can curb this behavior and, in some cases, fully prevents car overuse.