IDEAS home Printed from https://ideas.repec.org/a/cup/jinsec/v17y2021i4p545-559_2.html
   My bibliography  Save this article

Uncertainty and dispute resolution for blockchain and smart contract institutions

Author

Listed:
  • Howell, Bronwyn E.
  • Potgieter, Petrus H.

Abstract

Smart contracts have been proposed as a means of revolutionizing transacting between human actors and contributing to blockchain platforms substituting for many current institutions. However, the technical nature of blockchain platforms and smart contracts requires levels of certainty and foresight sufficient for contracts to be complete. We examine the technical and economic characteristics of blockchains and smart contracts to identify sources of uncertainty that may pose challenges to the ability of these technologies to displace existing institutional arrangements, in particular, the courts and other arbitration arrangements. Despite the development of alternative automated blockchain institutions such as the Kleros dispute resolution system, the case for smart contracts and blockchain applications to supplant real-world institutions remains weak. Inherent incompleteness due to limits to information availability, human cognition, and communication means that traditional contract governance institutions will continue to complement blockchain smart contract governance arrangements. The more complex and unique the transaction, the higher the value at risk, the harder to anticipate and precisely specify contingencies and measure and observe outcomes. Furthermore, the longer the time frame between agreement and execution, the less likely it is that smart contracting will be more efficient than traditional contracting.

Suggested Citation

  • Howell, Bronwyn E. & Potgieter, Petrus H., 2021. "Uncertainty and dispute resolution for blockchain and smart contract institutions," Journal of Institutional Economics, Cambridge University Press, vol. 17(4), pages 545-559, August.
  • Handle: RePEc:cup:jinsec:v:17:y:2021:i:4:p:545-559_2
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1744137421000138/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lehr, William, 2022. "Smart Contracts: Myths and Implications for Economics and Financial Regulation," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265650, International Telecommunications Society (ITS).
    2. S. Kaya & E. Şahin-Şengül, 2024. "Global Class Actions: Towards a Blockchain-Based Dispute Resolution System," Journal of Consumer Policy, Springer, vol. 47(1), pages 21-49, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jinsec:v:17:y:2021:i:4:p:545-559_2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/joi .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.