Reciprocal link
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A reciprocal link is a mutual link between two objects, commonly between two websites in order to ensure mutual traffic. Example: Alice and Bob have websites. If Bob's website links to Alice's website, and Alice's website links to Bob's website, the websites are reciprocally linked.
Website owners often submit their sites to reciprocal link exchange directories in order to achieve higher rankings in the search engines.
[edit] Three way linking
Three way linking (siteA -> siteB -> siteC -> siteA) is also a kind of reciprocal linking but a special case. This type of linking is becoming increasingly popular since some search engines are giving less consideration to the value of normal reciprocal links.
The attempt of this link building method is to create more "natural" links in the eyes of search engines. The value of links by three-way linking can then be better than normal reciprocal links, which are usually done between two domains.