Information Design in Blockchain: A Role of Trusted Intermediaries

Hitoshi Matsushima

No CIRJE-F-1121, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This study clarifies that blockchain cannot replace the strategic value of trusted intermediaries, despite sufficient technological advancement for its implementation. Given the progress expected in the future, this study assumes that blockchain can implement various commitment devices for communication explored in the information design literature, without disclosing their details to anonymous record keepers. By considering revelation incentives explicitly, we show that substituting the verification task of players' pre-owned private signals with a trusted intermediary can reduce transaction costs in liability, which cannot be achieved non-judicially by blockchain. Hence, trusted intermediaries play a significant role in executing information design through blockchain.

Pages: 19 pages
Date: 2019-07
New Economics Papers: this item is included in nep-des and nep-pay
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Related works:
Working Paper: Information Design in Blockchain: A Role of Trusted Intermediaries (2019)
Working Paper: Information Design in Blockchain: A Role of Trusted Intermediaries (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2019cf1121

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