Incentives - Peer-to-Peer Computing: Applications, Architecture, Protocols, and Challenges - page 75

To provide incentives in a P2P computing system, there are basically five
different classes of techniques.
1. Payment-Based Mechanisms: Users taking cooperative actions (e.g.,
sharing their files voluntarily) would obtain payments in return. The
payment may be real monetary units (in cash) or virtual (i.e., some
tokens that can be redeemed for other services). Thus, two important
components are needed: (1) currency; (2) accounting and clearing mech-
anism. Obviously, if the currency is in the form of real cash, there is a
need for a centralized authority, in the form of an electronic bank, that
is external to the P2P system. If the currency is in the form of vir-
tual tokens, then it might be possible to have a peer-to-peer clearing
mechanism. In both cases, the major objective is to avoid fraud at the
expense of significant overhead. Proper pricing of cooperative actions
is also important—over-priced actions would make the system econom-
ically ine cient while under-priced actions would not be able to entice
cooperation.
2. Auction-Based Mechanisms: In some situations, in order to come up
with an optimal pricing, auctioning is an effective mechanism. In simple
terms, auction involves bidding from the participating users so that the
user with the highest bid gets the opportunity to serve (or to be served,
depending on context). An important issue in auction based systems
is the valuation problem—how much a user should set in the bid? If
every user sets a bid higher than its true cost in providing a service,
then the recipient of the service would pay too much than is deserved.
On the other hand, if the bids are too low, the service providers may
suffer. Fortunately, in some form of auctions, proper mechanisms can be
constructed to induce bidders to bid at their true costs.
3. Exchange-Based Mechanisms: Compared to payment-based and
auction-based systems, exchange-(or barter-)based techniques manifest
as a purer P2P interaction. Specifically, in an exchange-based environ-
ment, a pair of users (or, sometimes, a circular list of users) serve each
other in a rendezvous manner. That is, service is exchanged in a syn-
chronous and stateless transaction. For example, a pair of users meet
each other and exchange files. After the transaction, the two users can
forget about each other in the sense that any future transaction be-
tween them is unaffected by the current transaction. This has an im-
portant advantage—very little overhead is involved. Most importantly,
peers can interact with each other without the need of intervention or
mediation by a centralized external entity (e.g., a bank). Furthermore,
free-riding is impractical. Of course, the downside is that service dis-
covery and peer selection (according to price and/or quality of service)
could be di cult.
4. Reciprocity-Based Mechanisms: While pure barter-based interac-