Abstract
We consider goods that can be shared with k-hop
neighbors (i.e., the set of nodes within k hops from
an owner) on a social network. We examine incentives to buy such a good by devising game-theoretic
models where each node decides whether to buy the
good or free ride. First, we find that social ineffi-
ciency, specifically excessive purchase of the good,
occurs in Nash equilibria. Second, the social inef-
ficiency decreases as k increases and thus a good
can be shared with more nodes. Third, and most
importantly, the social inefficiency can also be significantly reduced by charging free riders an access
cost and paying it to owners, leading to the conclusion that organizations and system designers should
impose such a cost. These findings are supported
by our theoretical analysis in terms of the price of
anarchy and the price of stability; and by simulations based on synthetic and real social networks