ECONOMIC INVESTIGATION OF PEER PRODUCED SERVICES

Abstract

The main focus of Web 2.0 is on contents and services. In this paper, we propose a game theoretical model to study the business model of peer production based services from the viewpoint of peer participants. As the potential users of the services are free to join, the concern of a typical participant is to evaluate if the benefit from provisioning a variety of resources is worthy. Both self-organized (decentralized) and firm-based (centralized) configurations are investigated The profit, network size and demand are also discussed To ensure the efficiency, an incentive mechanism is proposed. We found that both market configurations are not socially optimal, and would face the recondite trouble of over provisioning or under provisioning. From the view of profit-seeking participants, they would prefer the self-organized market structure.