C. Hota and P.K. Srimani (Eds.): ICDCIT 2013, LNCS 7753, pp. 347–360, 2013. © Springer-Verlag Berlin Heidelberg 2013 Trading of Grade Based Incentives to Avoid Free Riding and Starvation in P2P Network S. Moses Dian 1 and B. Ramadoss 2 1 Department of Computer Science and Engineering National Institute of Technology, Tiruchirapalli-620015, Tamilnadu, India mosesdian@gmail.Com 2 Department of Computer Applications National Institute of Technology, Tiruchirapalli-620015, Tamilnadu, India brama@nitt.edu Abstract. P2P networking has emerged as a successful Internet based compu- ting paradigm, which can provide an inexpensive platform for distributed computing. The success of P2P network is directly affected by the selfish beha- viours of the peers of the P2P network. To solve this issue, we propose a mod- ified grade based incentive mechanism to reward the cooperating peers and to encourage the free rider to become a good contributor based on the peer contri- bution to network function. Further if the free rider continues to act against the principles of P2P network, it will lose its credit points and eventually it will be eliminated from the P2P network. It also addresses the issue of starvation and introduces the mechanism of trading of incentives to avoid starvation. We de- sign a simulation to verify this approach and the results shows the improvement of fairness in resource sharing and robustness in P2P network. Keywords: P2P, free-rider, fairness, Credit points, starvation, Grade 1 Introduction Peer-To-Peer(P2P) systems are distributed systems which consist of thousands of interconnected heterogeneous nodes. These heterogeneous nodes can join or exit from P2P systems without any control. Main principles of P2P systems are self-organizing, and adapt to changing peer populations while providing services for content sharing and personal communications without requiring the support of centralized server or authority. Unlike Client/Server models, each node in a P2P system plays the role of a client as well as a server. These heterogeneous nodes share a part of their resources such as content, CPU cycles, storage and bandwidth etc[1]. P2P systems performance is plagued by many problems. One of which is the free- riding problem. A free rider is a peer that uses the file-sharing application to access content from others but does not contribute content to the same degree to the commu- nity of peers. Each node has a different character or has their own functions and also they belong to different organizations and individuals with different interests. Here an effective cooperative mechanism is lacking, and the nodes think of their own interests