The Economics of Peer-To-Peer Networks

Peer-to-Peer (P2P) networks have emerged as a popular alternative to traditional client-server architectures for the distribution of information goods. While there is a great deal of research on these networks in the computer science literature, until recently there has been little academic research considering the salient economic characteristics of these networks. In this paper, we outline some important economic characteristics of these networks. We show that while the characteristics of services provided over P2P networks are similar to public goods and club goods, they have many important differences and hence there is a need for new theoretical models as well as empirical and experimental analysis to understand user behavior. We then identify several important areas for study with regard to the economics of P2P networks and review recent academic papers in each area.