Pricing and Incentives in Peer-to-Peer Networks

13 years 3 months ago

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—Peer-to-peer (P2P) networks offer a cost effective and easily deployable framework for sharing user-generated content. However, intrinsic incentive problems reside in P2P networks as the transfer of content incurs costs both to uploaders and to downloaders while the beneﬁt accrues only to downloaders. We investigate the issues of incentives in content production and sharing over P2P networks using a game theoretic model. Peers do not share produced content at all at noncooperative equilibria whereas Pareto efﬁciency requires peers to fully share produced content. There is also a divergence in the total amount of produced content between non-cooperative equilibria and Pareto efﬁciency. By imposing full sharing, we decompose the inefﬁciency of non-cooperative equilibria into two parts, inefﬁciency due to no sharing and inefﬁciency due to underproduction. As a method to remedy the incentive problems in P2P networks, two classes of pricing schemes, MP pricing schemes and lin...

Jaeok Park, Mihaela van der Schaar

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