“Peer-to-Peer File Sharing & the Market for Digital Information Goods” Ramon Casadesus-Masanell (Harvard University) and Andres Hervas-Drane (Universitat Autonoma de Barcelona) Existing models of peer-to-peer (P2P) filesharing assume that individuals are concerned with each others' wellbeing. Without social preferences (i.e., altruism or reciprocity), peers are better off freeriding whenever the cost of sharing content is larger than that of not sharing. In the absence of social preferences this public-goods problem results in the collapse of the P2P network. Because P2P networks are composed of millions of individuals who interact anonymously, we find inadequate the assumption that peers care about each others' utility. We present microfoundations for a stylized model of a P2P network where all peers are endowed with standard preferences and show that the resulting endogenous structure of the P2P network is conducive to sharing content by a significant number of peers, even if sharing is costlier than freeriding. Selfish utility-maximizing peers are better off sharing because by doing so they face less congestion. We characterize the endogenous level of sharing and present comparative statics results. We build on this framework to analyze the optimal strategy of a profit-maximizing firm, such as Apple's i-Tunes, that offers the same content available on the network. Contrary to the P2P network, the firm offers downloads on a traditional client-server architecture and sells content at positive prices. We show that the firm may be better off setting high prices, allowing the network to survive, and that the P2P network may work more efficiently in the presence of the firm than in its absence.
Leia este blog no seu celular