Reciprocity in Economics

Reciprocity in economics refers to the mutual exchange of goods, services, or favors between parties, fostering cooperation and trust. It occurs when individuals or organizations respond to each other's actions with equivalent gestures—helping someone expecting similar help in return. This behavior encourages ongoing relationships, reduces transaction costs, and can stabilize markets by promoting fairness and collaboration. In essence, reciprocity underscores the social and economic importance of balanced exchanges, creating a foundation for sustainable interactions and mutual benefit.