To Rent or to Share?

Abstract

To improve the storage utilization inefficiency caused by consumers’ demand uncertainty, careful market designs are required. Storage sharing mechanisms have been proposed to tackle this challenge in the literature. However, the difficulties in calculating the sizing decisions render the storage sharing mechanism impractical. In this paper, we propose a storage renting mechanism. We note that the renting scheme alone cannot achieve the social optimal as storage sharing scheme does. However, our analysis shows that the overbooking strategy plays an important role in improving the efficiency of storage renting. Finally, we use simulation results to validate the value of overbooking.