Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Journal of Economics & Management Strategy

Peer-to-Peer File Sharing and the Market for Digital Information Goods

By: Ramon Casadesus-Masanell and Andres Hervas-Drane
  • Format:Print
  • | Pages:41
ShareBar

Abstract

We study competitive interaction between two alternative models of digital content distribution over the Internet: peer-to-peer (p2p) file sharing and centralized client-server distribution. We present microfoundations for a stylized model of p2p file sharing where all peers are endowed with standard preferences and show that the endogenous structure of the network is conducive to sharing by a significant number of peers, even if sharing is costlier than freeriding. We build on this model of p2p to analyze the optimal strategy of a profit-maximizing firm, such as Apple, that offers content available at positive prices. We characterize the size of the p2p network as a function of the firm's pricing strategy and show that the firm may be better off setting high prices, allowing the network to survive, and acknowledging that the p2p network may work more efficiently in the presence of the firm than in its absence.

Keywords

Competition; Distribution; Internet and the Web; Information Infrastructure; Management Analysis, Tools, and Techniques; Strategy; Profit; Price; Performance Efficiency

Citation

Casadesus-Masanell, Ramon, and Andres Hervas-Drane. "Peer-to-Peer File Sharing and the Market for Digital Information Goods." Journal of Economics & Management Strategy 19, no. 2 (Summer 2010): 333–373.
  • Find it at Harvard
  • Purchase

About The Author

Ramon Casadesus-Masanell

Strategy
→More Publications

More from the Authors

    • March 2025
    • Faculty Research

    adidas (B): Defining a Strategy for Reebok

    By: Ramon Casadesus-Masanell, Claudio Feser and Karolin Frankenberger
    • March 2025
    • Faculty Research

    adidas (A): Defining a Strategy for Reebok

    By: Ramon Casadesus-Masanell, Karolin Frankenberger and Claudio Feser
    • February 2025
    • Faculty Research

    RHI Magnesita Video Supplement

    By: Ramon Casadesus-Masanell
More from the Authors
  • adidas (B): Defining a Strategy for Reebok By: Ramon Casadesus-Masanell, Claudio Feser and Karolin Frankenberger
  • adidas (A): Defining a Strategy for Reebok By: Ramon Casadesus-Masanell, Karolin Frankenberger and Claudio Feser
  • RHI Magnesita Video Supplement By: Ramon Casadesus-Masanell
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.