The paper offers a framework to explain large scale effective practices of sharing private, excludable goods. It starts with case studies of distributed computing and carpooling as motivating problems. It then suggests a definition for “shareable goods” as goods that are lumpy and mid-grained in size, and explains why goods with these characteristics will have systematic overcapacity relative to the requirements of their owners. The paper then uses comparative transaction costs analysis, focused on information characteristics in particular, combined with an analysis of diversity of motivations, to suggest when social sharing will be better than secondary markets to reallocate this overcapacity to non-owners who require the functionality. The paper concludes with broader observations about the role of sharing as a modality of economic production as compared to markets and hierarchies (whether states or firms), with a particular emphasis on sharing practices among individuals who are strangers or weakly related, its relationship to technological change, and some implications for contemporary policy choices regarding wireless regulation, intellectual property, and communications network design.
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