Smart Contracts and Reaction Function Games

Open online seminar with Jens Leth Hougaard, Department of Food and Resource Economics.

About the seminar 

Blockchain-based smart contracts offer a new take on credible commitment, where players can commit to actions in reaction to actions of others. Such reaction-function games extend on strategic games with players choosing reaction functions instead of strategies.

Jens and his research team have formalized a solution concept in terms of fixed points for such games, akin to Nash equilibrium, and prove equilibrium existence. Reaction functions can mimic ``trigger'' strategies from folk theorems on infinitely repeated games---but now in a one-shot setting. This research introduces a refinement in terms of safe play.

"We apply our theoretical framework to symmetric investment games, which includes two prominent classes of games, namely weakest-link and public-good games. In both cases, we identify a safe and optimal reaction function. In this way, our findings highlight how blockchain-based commitment can overcome trust and free-riding barriers." - Jens Leth Hougaard, from abstract.

How to participate

The seminar is open to all.
The seminar will take place online via Zoom.