Enabling reciprocity through blockchain design

Jens Gudmundsson and Jens Hougaard ()

No 2020/14, IFRO Working Paper from University of Copenhagen, Department of Food and Resource Economics

Abstract: 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.

Keywords: Blockchain; reciprocity; protocol design; Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C62 C72 D02 D63 D91 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-12, Revised 2021-02-09
New Economics Papers: this item is included in nep-des, nep-exp, nep-gth and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:foi:wpaper:2020_14

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