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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28522
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| Title: | Online Peer-to-peer Communities: An Empirical Investigation of a Music
Sharing Network as a Dynamic Two-sided Network |
| Authors: | Gu, Bin - University of Texas
Huang, Yun - University of Texas
Duan, Wenjing - George Washington University
Whinston, Andrew - University of Texas |
| Keywords: | online communities, two-sided networks, IRC channel, P2P music sharing,
evolutionary games, digital piracy |
| Issue Date: | 2007 |
| Series/Report no.: | NET Institute Working Paper;07-42 |
| Abstract: | Online peer-to-peer communities and online social networks have become
increasingly popular. In particular, the recent boost of online
peer-to-peer communities leads to exponential growth in sharing of
user-contributed content which have brought profound changes to business
and economic practices. Understanding the formation and sustainability
of such peer-to-peer communities has important implications for
businesses. We develop a dynamic two-sided network model that relates
growth of communities to interactions between contribution and
consumption of resources in online sharing activities. Using online
music sharing data collected from a popular IRC music sharing service
over five years, we empirically apply the model to identify dynamics in
the music sharing community. We find that the music sharing community
demonstrates distinctive characteristics of a two-sided network.
Contribution in the community leads to more consumption and consumption
leads to more contribution, creating positive network effects in the
community. Moreover, we find significant negative externalities among
consumption activities and among contribution activities. The
combination of the positive and negative externalities drives the
underlying dynamics and growth of online sharing communities. Using the
dynamic model, we quantify equilibrium growth rate of the community. We
find that the equilibrium growth rate changes over time, possibly as a
result of legal actions taken by the music industry. Our study provides
a first glimpse into the mechanism through which peer-to-peer
communities sustain and thrive in a constantly changing environment. |
| URI: | http://hdl.handle.net/2451/28522 |
| Appears in Collections: | NET Institute Working Papers Series
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