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Peer-to-Peer (P2P) network allow peer to distribute and obtain a file to be shared cooperatively. The successful growth of P2P network and its application is plagued by two important problems like Free Rider and Tragedy of commons, i.e. some selfish peers only download files without sharing its resources. This paper investigates the Free Rider and Tragedy of Common problem and encourages a peer to participate by proposing a trust agent based incentive mechanism. After applying this system theoretically, it improves the performance of the P2P system. Result obtained shows significant improvement which concludes that the proposed incentive mechanism will reduce the impact of Free Rider problem and effectively achieve fair sharing in P2P system.