# Why You Should Charge Your Friends for Borrowing Your Stuff

## TL;DR

This paper analyzes how charging for shared goods in social networks can reduce over-purchasing and improve efficiency, supported by game theory and simulations.

## Contribution

It introduces a game-theoretic model showing that imposing access costs reduces social inefficiency in shared goods networks.

## Key findings

- Social inefficiency decreases as sharing range increases.
- Charging free riders significantly reduces over-purchasing.
- Theoretical and simulation results support cost-imposition benefits.

## Abstract

We consider goods that can be shared with k-hop neighbors (i.e., the set of nodes within k hops from an owner) on a social network. We examine incentives to buy such a good by devising game-theoretic models where each node decides whether to buy the good or free ride. First, we find that social inefficiency, specifically excessive purchase of the good, occurs in Nash equilibria. Second, the social inefficiency decreases as k increases and thus a good can be shared with more nodes. Third, and most importantly, the social inefficiency can also be significantly reduced by charging free riders an access cost and paying it to owners, leading to the conclusion that organizations and system designers should impose such a cost. These findings are supported by our theoretical analysis in terms of the price of anarchy and the price of stability; and by simulations based on synthetic and real social networks.