Olson's Paradox Revisited: An Empirical Analysis of incentives to contribute in P2P File-Sharing Communities

Abstract

This article aims to examine how the size of P2P file-sharing communities affects their functioning and performance (i.e. their capacity to share and distribute content). Olson (1965) argued that small communities are more able to provide collective goods. Using an original database on BitTorrent file-sharing communities, our article finds a positive relation between the size of a community and the amount of collective good provided ; However, the individual propensity to cooperate decreases with community size. These two features seem to indicate that P2P file-sharing communities provide a pure (non rival) public good. We also show that specialized communities are more efficient than general communities to encourage cooperative behavior. Finally, the rules designed by the administrators of these communities play an active role to stimulate voluntary contributions and improve the self-sustainability of file-sharing.

Keywords: File-sharing, peer-to-peer, group size, voluntary contribution

JEL Classification: H44, L86