Bayesian rational exchange

The notion of rational exchange introduced by Syverson (Proceedings of the 11th IEEE Computer Society Foundations Workshop, pp. 2-13, 1998) is a particularly interesting alternative when an efficient scheme for fair exchange is required but the use of a trusted third party is not allowed. A rational exchange protocol cannot provide fairness, but it ensures that rational (i.e., self-interested) parties would have no reason to deviate from the protocol. Buttyan et al. (J. Comput. Security 12(3/4), 551-588, 2004) have recently pointed out how rationality in exchange protocols can be formalized and studied within the framework provided by Game Theory. In particular, Buttyan's formal model was used to analyze Syverson's rational exchange protocol. In this paper, we identify a series of drawbacks in Buttyan's model which make it somewhat restrictive and unrealistic. We propose an extension to the model which enables us to consider different classes of protocol parties (e.g., honest and dishonest parties), as well as modeling attributes such as reputation or any other participant beliefs that could have an effect on the protocol outcome. The resulting new model enables us to reason rational exchange protocols from the point of view of Bayesian rationality, a notion that may be in some scenarios more appropriate than that defined in terms of Nash equilibrium.