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Blockchain-Based Dispute Resolution: Insights and Challenges

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  • Yannick Gabuthy

    (BETA, CNRS, University of Lorraine, Maison de la Recherche, 23 rue Baron Louis, 54000 Nancy, France)

Abstract

A smart contract can be defined as a computer program, stored on a blockchain, which allows a transaction or an agreement—defined ex-ante —to be self-executed when some conditions are met, and without the need for a central authority to enforce it. Even if this new technology is very promising, it may face a challenge: the codified nature of smart contracts creates new types of disputes that require new mechanisms of dispute resolution, which are precisely based on the blockchain. The aim of this article is to analyze one of these emerging mechanisms, namely Kleros, which is a blockchain-based dispute resolution platform implying crowdsourced jurors whose incentives to make fair decisions are based on game theory. The Kleros case provides also a basis for a broader discussion on the future of the decentralized justice market.

Suggested Citation

  • Yannick Gabuthy, 2023. "Blockchain-Based Dispute Resolution: Insights and Challenges," Games, MDPI, vol. 14(3), pages 1-9, April.
    • Handle: RePEc:gam:jgames:v:14:y:2023:i:3:p:34-:d:1134994
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    References listed on IDEAS

    as
    1. Gabuthy, Yannick & Jacquemet, Nicolas & Marchand, Nadège, 2008. "Does resorting to online dispute resolution promote agreements? Experimental evidence," European Economic Review, Elsevier, vol. 52(2), pages 259-282, February.
    2. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-1326, December.
    3. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    4. Oliver Hart & John Moore, 1999. "Foundations of Incomplete Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 115-138.
    5. Gabuthy, Yannick & Jacquemet, Nicolas & Marchand, Nadège, 2008. "Does resorting to online dispute resolution promote agreements? Experimental evidence," European Economic Review, Elsevier, vol. 52(2), pages 259-282, February.
    6. Cary Deck & Amy Farmer & Dao-Zhi Zeng, 2007. "Amended final-offer arbitration over an uncertain value: A comparison with CA and FOA," Experimental Economics, Springer;Economic Science Association, vol. 10(4), pages 439-454, December.
    7. Barbara Luppi & Francesco Parisi, 2013. "Jury Size and the Hung-Jury Paradox," The Journal of Legal Studies, University of Chicago Press, vol. 42(2), pages 399-422.
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