Platform Precommitment via Decentralization

Platform Precommitment via Decentralization
READ MORE...
Volume/Issue: Volume 2024 Issue 028
Publication date: February 2024
ISBN: 9798400267284
$20.00
Add to Cart by clicking price of the language and format you'd like to purchase
Available Languages and Formats
English
Prices in red indicate formats that are not yet available but are forthcoming.
Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Labor , Economics- Macroeconomics , Taxation - General , Economics / General , blockchain , smart contracts , decentralization , cryptocurrency , commitment , platforms , entrepreneur's incentive , decentralized platform , platform's user , entrepreneur keep , decentralized governance , Self-employment , Revenue sharing , Blockchain and DLT

Also of interest
WORKING PAPERS PUBLISHED IN APRIL 2004
WORKING PAPERS PUBLISHED IN DECEMBER 2005
WORKING PAPERS PUBLISHED IN DECEMBER 2005
WORKING PAPERS PUBLISHED IN DECEMBER 2004
Summary

I study an entrepreneur’s incentives to build a decentralized platform using a blockchain. The entrepreneur can either build the platform using a regular company and retain control of the platform, or build the platform using a blockchain and surrender control of the platform. In either case, the platform’s users experience a locked-in effect. I show that a decentralized implementation of the platform is both (i) more profitable for the entrepreneur and (ii) a Pareto improvement, if and only if the size of the locked-in effect exceeds some threshold. Further, progressive decentralization through airdrops can be optimal.

Powered by: AIDC