Incentives for large peer-to-peer systems

We consider problems of provisioning an excludable public good amongst n potential members of a peer-to-peer system who are able to communicate information about their private preferences for the good. The cost of provisioning the good in quantity Q depends on Q, and may also depend on n, or on the final number of participating peers, m. Our aim is to maximize social welfare in a way that is incentive compatible, rational and feasible. Although it is unfortunately almost never possible to calculate or implement a truely optimal Mechanism Design, we show that as the number of participants becomes large the expected social welfare that can be obtained by the optimal design is at most a factor 1 + O(1/n) or 1 + O(1/ n) greater than that which can be obtained with a very simple scheme that requires only a fixed contribution (payment) from any agent who joins the system as a participating peer. Our first application is to a model of file sharing, in which the public good is content availa...

• Type: Journal
• Year: 2006
• Where: JSAC
• Authors: Costas Courcoubetis, Richard R. Weber
• Keywords: JSAC 2006, Optimal Mechanism Design, Potential Members, Social Welfare