Club Formation by Rational Sharing : Content, Viability and Community Structure

TL;DR

This paper models the formation of sharing communities by analyzing how rational peers decide to contribute or free-ride, considering content and community structure to understand viability and limitations of club formation.

Contribution

It introduces a model that separates participation and contribution decisions, analyzing their impact on community viability and structure based on peer and content heterogeneity.

Findings

Rational peer behavior explains contribution and free-riding dynamics.

Community viability depends on peer interest and sharing supply.

Structural limitations affect club formation beyond free-riding.

Abstract

A sharing community prospers when participation and contribution are both high. We suggest the two, while being related decisions every peer makes, should be given separate rational bases. Considered as such, a basic issue is the viability of club formation, which necessitates the modelling of two major sources of heterogeneity, namely, peers and shared content. This viability perspective clearly explains why rational peers contribute (or free-ride when they don't) and how their collective action determines viability as well as the size of the club formed. It also exposes another fundamental source of limitation to club formation apart from free-riding, in the community structure in terms of the relation between peers' interest (demand) and sharing (supply).