Abstract

We devise a simple model to study the phenomenon of free-riding and the effect of free identities on user behavior in peer-to-peer systems. At the heart of our model is a strategic user of a certain type, an intrinsic and private parameter that reflects the user's generosity. The user decides whether to contribute or free-ride based on how the current burden of contributing in the system compares to her type. We derive the emerging cooperation level in equilibrium and quantify the effect of providing free-riders with degraded service on the emerging cooperation. We find that this penalty mechanism is beneficial mostly when the "generosity level" of the society (i.e., the average type) is low. To quantify the social cost of free identities, we extend the model to account for dynamic scenarios with turnover (users joining and leaving) and with whitewashers: users who strategically leave the system and re-join with a new identity. We find that the imposition of penalty on all legitimate newcomers incurs a significant social loss only under high turnover rates in conjunction with intermediate societal generosity levels.

Citations