Group size and free riding when private and public goods are gross substitutes

Gaube, Thomas

doi:10.1016/s0165-1765(00)00329-3

Cited by 17 publications

(15 citation statements)

References 11 publications

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“…Users clearly have an incentive to free ride with respect to content and bandwidth, which means "taking their share of it and keeping their own resources for themselves" (Marwell and Ames 1979). Economic literature on private provision of public goods suggests that typically the free riding problem worsens with the group size (see, for example, Isaac and Walker 1988;Gaube 2001). Asvanund et al (2002) confirmed the existence of a positive correlation between free loading and crowding in P2P networks.…”

Section: Resource Sharingmentioning

confidence: 90%

A resource‐based analysis of peer‐to‐peer technology

Pavlov

Saeed²

2004

System Dynamics Review

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Peer-to-peer technology allowed massive free music file sharing, which led to much controversy, legal debate, and a great deal of speculation about the technology's business viability. Operation of a peer-to-peer (P2P) network depends on the content and bandwidth contributions from its users. Many users free ride by contributing fewer resources than they use. Research found that free riding intensifies with crowding. These salient features suggest that the underlying template describing a P2P system may be the limits to growth archetype. We expand on this idea by building a system dynamics model, which captures complex causal interactions between private provision of common resources, free riding, network performance, and membership dynamics. Base runs confirm that the model reproduces historically observed behavior. We use the calibrated model to test effectiveness of certain modifications that have been proposed for real P2P networks. Simulation results are explained by reviewing the interplay of reinforcing and limiting feedbacks that drive the system. Copyright © 2004 John Wiley & Sons, Ltd. Syst. Dyn. Rev. 20, 237-262, (2004 In 1999, 19-year old Shawn Fanning released Napster software. Its sole purpose was to allow music lovers to swap free MP3 files. Within 20 months, 65 million people used the software to trade music (Leuf 2002, p. 191). A group of big record labels responded with a fierce legal offensive against Napster, Inc. The group claimed that the P2P network violated copyright laws and cost them millions of dollars in lost CD sales (CNN Money 2002). Napster, Inc. eventually lost the case in court and had to shut down. However, a number of peer-to-peer networks withstood legal challenges and are thriving. Two popular systems are Gnutella and KaZaA. Unlike Napster, current systems do not require a central server or a centralized controlling body.The phenomenal popularity of the technology led to the predictions of an approaching peer-to-peer revolution in electronic commerce. Commercial adoption of P2P systems may be driven by its many coveted features: distributed cost of storage, distributed processing cost, autonomy of nodes, robustness against malicious attacks, and load balancing (Yang and Garcia-Molina 2002a About 60 per cent of Americans, or 174.6 million people, regularly use the Internet (Lenhart et al. 2003). Millions of additional devices including various appliances will come online after the adoption of the IPv6 protocol (Tanenbaum 2003, p. 464). The pressing issue is whether or not peer technology can scale to accommodate all the potential online users. Some experts have concluded that peer-to-peer technology is not capable of handling large volumes of traffic required for successful scaling (Ritter 2001). Proponents of the technology disagreed (Kabanov 2001), suggesting that as nodes gain access to faster connections the problem would go away (Shirky 2000).An examination of a typical peer-to-peer system suggests that it may be described by the limits to growth archetype (Sen...

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Section: Resource Sharingmentioning

confidence: 90%

A resource‐based analysis of peer‐to‐peer technology

Pavlov

Saeed²

2004

System Dynamics Review

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“…Following the analysis in Gaube (2001), I will employ the Lindahl allocation as a reference point for efficient charitable giving. 10 In the present context, the Lindahl equilibrium is defined as follows:…”

Section: The Modelmentioning

confidence: 99%

“…Gaube (2001) has pointed out that the additional assumption of gross substitutability between these commodities is sufficient for a negative effect of group size on the variable (iii).…”

Section: Introductionmentioning

confidence: 99%

“…In analogy to Lemma 2 of Gaube (2001), part (a) of the following Proposition 3 points out that this assumption is sufficient for obtaining a positive relationship between the per-capita contribution g * (N, K) in the Lindahl equilibrium and the group size parameter N .…”

mentioning

confidence: 95%

“…Therefore, the literature has concentrated on examples where U i (x i , G) is either quasilinear or Cobb-Douglas (see Sandler 1992, Chapter 7 for a critical discussion). The Cobb-Douglas example has been generalized in Gaube (2001) by showing that the index of easy riding is decreasing in group size provided that the commodities x i and G are strictly normal and weak gross substitutes. Since the assumption of strict normality is crucial for uniqueness of the Nash equilibrium and has been employed also in Section 3, I will use this finding as a reference point for the subsequent analysis.…”

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confidence: 99%

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Altruism and Charitable Giving in a Fully Replicated Economy

Gaube

2005

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractIn this paper, an economy is analyzed where one group of agents, the altruists, cares about the well-being of another group of agents, the recipients. It is asked how changes in the size of these groups affect the altruists' charitable giving in the Nash equilibrium. I show that a pure group size effect, i.e., a proportional expansion of both subgroups can lead to less free riding and to a lower degree of underprovision relative to the efficient level of charitable giving.

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International Environmental Agreements Reconsidered

Buchholz

Peters

2003

Environmental Policy in an International Perspective

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Group size and free riding when private and public goods are gross substitutes

Cited by 17 publications

References 11 publications

A resource‐based analysis of peer‐to‐peer technology

A resource‐based analysis of peer‐to‐peer technology

Altruism and Charitable Giving in a Fully Replicated Economy

International Environmental Agreements Reconsidered

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