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We propose a service differentiated peer selection mechanism for peer-to-peer media streaming systems. The mechanism provides flexibility and choice in peer selection to the contributors of the system, resulting in high quality streaming sessions. Free-riders are given limited options in peer selection,if any, and hence receive low quality streaming. The proposed incentive mechanism follows the characteristics of rank-order tournaments theory that considers only the relative performance of the players, and the top prizes are awarded to the winners of the tournament. Using rank-order tournaments, we analyze the behavior of utility maximizing users. Through simulation and wide-area measurement studies, we verify that the proposed incentive mechanism can provide near optimal streaming quality to the cooperative users until the bottleneck shifts from the streaming sources to the network.