The Economics of Peer-to-Peer

  • Alain Bourdeau de Fontenay
  • Eric Bourdeau de Fontenay
  • Lorenzo Maria Pupillo

Peer-to-Peer networks boast three characteristics that make them unique. First, they are layered networks conceived and operating in a similar fashion to the Internet. Second, they are completely decentralized, making servers of individual computers at the Peer-to-Peer layer, and acting in the way an ISP acts at the Internet IP layer. Finally, Peer-to-Peer networks are made up of the resources that individual members make available when they use their Peer-to-Peer networks.1 These networks, which were initially used by individuals to share and download content, including a significant amount of copyright material such as music, are now increasingly used for downloading games, videos, and software.

In this paper, we focus on the economics of Peer-to-Peer in terms of the impact that Peer-to-Peer innovation is having on the content sector, especially on copyrighted material, and on how the latter has in turn influenced Peer-to-Peer networks. Peer-to-Peer technology makes a server of endusers. In addition, while Peer-to-Peer network service providers may retain some control over their own networks, this control is effectively restricted to the Peer-to-Peer layer as a pure transport and file-sharing layer, and is independent of the content that is shared, at least in the post-Napster era.


Transaction Cost Technological Change Market Failure Content Owner Copyright Owner 


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Copyright information

© Springer Science + Business Media, LLC 2008

Authors and Affiliations

  • Alain Bourdeau de Fontenay
    • 1
  • Eric Bourdeau de Fontenay
    • 2
  • Lorenzo Maria Pupillo
    • 3
  1. 1.Columbia UniversityUSA
  2. 2.MusicDish LCCUSA
  3. 3.Telecom ItaliaItaly

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