Contracting Models for P2P Content Distribution

In recent years, peer-to-peer (P2P) networks have become an increasingly popular method for distributing digital content. In this study, we consider the development of optimal contracts for a P2P network by a profit-seeking provider to support the operations of an online file exchange service. By utilizing the principal-agent model of incentive theory, we propose appropriate reward and pricing schemes for profit-seeking P2P content distribution networks. We show that when peers are homogeneous, upload compensation increases with propagation delay uncertainty, maximum uploading nodes allowed, peers' provision cost and disutility of download delay, but decreases with the network size and content availability. We also characterize a general contracting model where there are a countable number of peer classes which are heterogeneous in their provisioning costs. For the case of two peer classes where optimal delays are separable, we derive the optimal upload compensations under different scenarios and show that the impact of operational parameters is quite similar to the case of homogeneous peers, lending support to the robustness of our analysis.