Sharing sequentially triggered losses: Automatic conflict resolution through smart contracts

Jens Gudmundsson, Jens Leth Hougaard () and Chiu Yu Ko
Additional contact information
Jens Leth Hougaard: Department of Food and Resource Economics, University of Copenhagen

No 2020/05, IFRO Working Paper from University of Copenhagen, Department of Food and Resource Economics

Abstract: When actions by one agent force another to deviate from their agreements with a third, "victim" turns into "injurer" in the chain's subsequent steps. Should the chain's initiator be responsible only for the direct harm they cause or also bear some of the indirect losses they trigger? Through an axiomatic approach, we characterize the class of fixed-fraction rules, which strike a balance between incentives for accident prevention on the one hand and fairness in terms of how liabilities are assigned on the other. Their simple design make the rules ideal for practical implementation through smart contracts, enabling automated conflict resolution.

Keywords: Sequential losses; Fair allocation; Smart contracts; Cost allocation (search for similar items in EconPapers)
JEL-codes: C7 D6 K12 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2022-12
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://okonomi.foi.dk/workingpapers/WPpdf/WP2020/IFRO_WP_2020_05_rev_2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:foi:wpaper:2020_05_rev_2

Access Statistics for this paper

More papers in IFRO Working Paper from University of Copenhagen, Department of Food and Resource Economics Contact information at EDIRC.
Bibliographic data for series maintained by Geir Tveit ().