Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/227737 
Year of Publication: 
2020
Series/Report no.: 
IFRO Working Paper No. 2020/14
Version Description: 
First published December 2020, revised February 2021
Publisher: 
University of Copenhagen, Department of Food and Resource Economics (IFRO), Copenhagen
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 specific 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.
Subjects: 
Blockchain
reciprocity
protocol design
Nash equilibrium
JEL: 
C62
C72
D02
D63
D91
Document Type: 
Working Paper

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