Club formation by rational sharing: Content, viability and community structure

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).