A game theoretic analysis of incentives in content production and sharing over peer-to-peer networks

Peer-to-peer (P2P) networks can be easily deployed to distribute user-generated content at a low cost, but the free-rider problem hinders the efficient utilization of P2P networks. Using game theory, we investigate incentive schemes to overcome the free-rider problem in content production and sharing. We build a basic model and obtain two benchmark outcomes: 1) the non-cooperative outcome without any incentive scheme and 2) the cooperative outcome. We then propose and examine three incentive schemes based on pricing, reciprocation, and intervention. We also study a brute-force scheme that enforces full sharing of produced content. We find that 1) cooperative peers share all produced content while non-cooperative peers do not share at all without an incentive scheme; 2) by utilizing the P2P network efficiently, the cooperative outcome achieves higher social welfare than the non-cooperative outcome does; 3) a cooperative outcome can be achieved among non-cooperative peers by introducing an incentive scheme based on pricing, reciprocation, or intervention; and 4) enforced full sharing has ambiguous welfare effects on peers. In addition to describing the solutions of different formulations, we discuss enforcement and informational requirements to implement each solution, aiming to offer a guideline for protocol design for P2P networks.