Reciprocation Effort Games

Abstract

Consider people dividing their time and effort between friends, interest clubs, and reading seminars. These are all reciprocal interactions, and the reciprocal processes determine the utilities of the agents from these interactions. To advise on efficient effort division, we determine the existence and efficiency of the Nash equilibria of the game of allocating effort to such projects. When no minimum effort is required to receive reciprocation, an equilibrium always exists, and if acting is either easy to everyone, or hard to everyone, then every equilibrium is socially optimal. If a minimal effort is needed to participate, we prove that not contributing at all is an equilibrium, and for two agents, also a socially optimal equilibrium can be found. Next, we extend the model, assuming that the need to react requires more than the agents can contribute to acting, rendering the reciprocation imperfect. We prove that even then, each interaction converges and the corresponding game has an equilibrium.