Peer-to-Peer Technology Business and Service Models: Risks and Opportunities

Abstract

The sharing and downloading of information goods over peer-to-peer (P2P) networks has become a common way for millions of Internet users worldwide to find and trade music, software and other digital media files. In order for P2P networks to evolve into efficient economic marketplaces several issues need to be addressed. Peers may act in different roles, they can be contributors or consumers of the traded goods. Intermediaries may or may not emerge to better facilitate the trade. This paper discusses supplier risks and business opportunities arising from P2P service models. We propose some participation incentive mechanisms to mitigate free riding risk and improve the overall economic efficiency of P2P trading services and briefly outline how these could be implemented as software features in P2P application systems. This paper also examines the roles of P2P agents and concludes with a three-layer model that describes P2P services at the technology application level, the community application level, and the business application level.