Abstract: The sharing economy represented by Airbnb and Uber has become a hot topic in academia, but the current research focuses on the business model, ignoring the social welfare analysis that highlights its "Pratt & Whitney" nature. Drawing upon the conceptual idea "Being not in use is not different from being wasted," it is held that every transaction in sharing economy market is a manifestation of Pareto Improvement, and a theoretical analysis is conducted in terms of the factors affecting the quantity and measure of social welfare. Furthermore, upon this analytical foundation, the paradigmatic models concerning the market structure are summarized and extracted, which characterize the three consecutive developmental stages of the sharing economy. In the meantime, some mathematical modules are constructed to delineate the intrinsic relationships among technology empowerment, user scale and social welfare regarding different developmental stages of the sharing economy. The result shows that:at the initial stage, the market is in a state of local monopoly, at this time the loss of economic and social welfare is manifest, and the level of welfare depends mainly on the technical empowerment; at the developmental stage, with the market areas of the sharing economy platforms overlapping, user-scale expansion competition will enhance social welfare; at the mature stage, featuring the merger and acquisition among platforms and the formation of "competitive monopoly" market structure, the social welfare may be boosted again. Further model analysis reveals its internal mechanism:technology has the dual effect of "substitution" and "excavation" on social welfare, while user scale exerts positive and negative external effects on social welfare. A useful guidance is offered to the platform strategy and government regulation of sharing economy.

Key words: sharing economy, social welfare, technology empowerment, user scale, market structure