Enabling reciprocity through blockchain design

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We introduce a reciprocity protocol, an innovative approach to coordinating and sharing rewards in blockchains. Inherently decentralized and easy to implement, it puts emphasis on incentives rather than forcing specic sharing rules from the outset. Analyzing the non-cooperative game the protocol induces, we identify a robust, strict, and Pareto-dominant symmetric equilibrium. In it, even self-centered participants show extensive reciprocity to one another. Thus, despite a setting
that is generally unfavorable to reciprocal behavior, the protocol manages to build trust between the users by taking on a role akin to a social contract.
Original languageEnglish
PublisherDepartment of Food and Resource Economics, University of Copenhagen
Number of pages28
Publication statusPublished - 2021
SeriesIFRO Working Paper
Number2020/14

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