Online communities exist in many forms and sizes. Yet, there is limited insight into why some online communities are sustainable, while others disappear. We find that in order to maintain sustainability, online communities exhibit a typical hierarchical social circle structure that balances...

We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups – communities – that allow repeated interaction. Hierarchies provide incentives...