The Giving Game

TL;DR

The paper introduces a simple model of a gift economy called the Giving Game, demonstrating how a community effect can lead to a small subgroup monopolizing circulating goods, with applications in various economic and computational contexts.

Contribution

It provides a fundamental structural analysis of gift economies through the Giving Game, highlighting the community effect and its implications for economics and distributed systems.

Findings

Small subgroup eventually monopolizes circulating goods

Community effect leads to concentration of resources

Applicable to computer sharing, trading, and corruption models

Abstract

This paper describes a basic model of a gift economy in the shape of a Giving Game and reveals the fundamental structure of such a game. Main result is that the game shows a community effect in that a small subgroup of players eventually keeps all circulating goods for themselves. Example applications are where computers are sharing processing power for complex calculations, or when commodity traders are making transactions in some professional community. The Giving Game may equally well be viewed as a basic model of clientelism or corruption. Keywords in this paper are giving, gift economy, community effect, stabilization, computational complexity, corruption, micro-economics, game theory, stock trading, distributed computing, crypto currency, blockchain.