Abstract for: Pricing and Rebound Effects in Product Sharing Systems

Circular economy practices such as product sharing are often assumed to reduce production and having positive environmental impacts. However, behavioral and market responses may undermine these benefits through rebound effects. This study investigates how pricing influences the emergence and strength of rebound effects in product sharing systems. A generic system dynamics model is developed to capture the interactions between consumer adoption, usage intensity, owner participation, and production. The model incorporates key rebound mechanisms, including increased use due to lower prices and reduced product lifetimes. Structural behavior tests and sensitivity analyses are conducted to examine system behavior across different price levels and platform cuts. Results reveal a nonlinear relationship between price and emission savings. Low prices encourage adoption but also activate strong rebound effects, leading to increased usage and production. High prices suppress adoption and limit the effectiveness of sharing. Between these extremes, an intermediate price region emerges where emission savings are maximized The findings show the importance of pricing as a critical determinant of whether product sharing systems deliver environmental benefits or trigger rebound effects. The study provides insights into designing pricing strategies that help achieve sustainability goals while avoiding rebounds. AI tools were utilized for grammar correction and language clarity.