Holds enable one-shot reciprocal exchange

Strangers routinely cooperate and exchange goods without any knowledge of one another in one-off encounters without recourse to a third party, an interaction that is fundamental to most human societies. However, this act of reciprocal exchange entails the risk of the other agent defecting with both goods. We examine the choreography for safe exchange between strangers, and identify the minimum requirement, which is a shared hold, either of an object, or the other party; we show that competing agents will settle on exchange as a local optimum in the space of payoffs. Truly safe exchanges are rarely seen in practice, even though unsafe exchange could mean that risk-averse agents might avoid such interactions. We show that an 'implicit' hold, whereby an actor believes that they could establish a hold if the other agent looked to be defecting, is sufficient to enable the simple swaps that are the hallmark of human interactions and presumably provide an acceptable trade-off between risk and convenience. We explicitly consider the particular case of purchasing, where money is one of the goods.

Automated summary

Cooperation and exchange between strangers without knowledge of each other is fundamental to human societies, but also carries the risk of defecting agents. We examine the minimum requirement for safe exchange between strangers and show that competing agents settle on exchange as a local optimum. Truly safe exchanges are rare, but an "implicit" hold is sufficient to enable common swaps that provide a trade-off between risk and convenience.