|Author||Lin William Cong, Zhiguo He|
|Link||View Research Paper|
Blockchain technology features decentralised consensus as well as tamper-proof and algorithmic executions, and consequently enlarges the contracting space through smart contracts. Meanwhile, the process of generating decentralised consensus, which involves information distribution, necessarily alters the informational environment. But what about blockchain disruption?
The authors of this research paper outline how decentralisation improves consensus effectiveness, and how the quintessential features of blockchain reshape industrial organisation and the landscape of competition.
Smart contracts can mitigate information asymmetry and deliver higher social welfare and consumer surplus through enhanced entry and competition, yet blockchains may also encourage collusion due to the irreducible distribution of information, especially in consensus generation. In general, blockchains can sustain market equilibria with a larger range of economic outcomes.
This paper further discuss anti-trust policy implications targeted to blockchain applications, such as separating consensus record-keepers from users and other ways that blockchain disruption can take place.