The Virtual Commons: Why Free-Riding Can Be Tolerated in File Sharing Networks

Peer-to-peer networks have emerged as a popular alternative to traditional client-server architectures for the distribution of information goods. Recent academic studies have observed high levels of free-riding in various peer-to-peer networks, leading some to suggest the imminent collapse of these communities as a viable information sharing mechanism. Our research develops an analytic model to analyze the behavior of P2P networks in the presence of free-riding. In contrast to previous predictions we find that P2P networks can operate effectively in the presence of significant free-riding. In future work we plan to explore how much peerto-peer network performance could be improved if free-riding were eliminated and discuss both the costs and benefits of managerial mechanisms to limit free-riding.