Year: 2025
Type: article
Abstract: ABSTRACT I develop a theoretical model showing that an entrepreneur prefers to create a decentralized digital platform with a crypto‐token as its internal currency (rather than a traditional platform) when the total surplus from trade is low relative to the dollar value of transactions. I then study inefficiencies in the development of such platforms. When external funding is not required, effort may be above or below its efficient level. When external funding is required, multiple Pareto‐ranked equilibria arise: in each, with strictly positive probability, the entrepreneur liquidates his tokens and halts development.
Source: Journal of Industrial Economics
DOI: 10.1111/joie.70010
Author: Andrea Canidio
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3046726220