The Deceptive Efficiency of Smart Contracts: Hidden Opportunism in Certainty

Abstract

The optimism for smart contracts is derived from the cost-saving efficiency benefits in contractual construction, enforcement, and provisions of legal certainty. However, this paper analyzes from a behavioral standpoint the problem of opportunism in incomplete contract theory and relation-based contract theory, leading to an evaluation of how smart contracts might consequently lead to the amplification of such costs of opportunism, overall making them less efficient compared to conventional natural language contracts.

Keywords: Smart Contracts, Contract Theory, Opportunism, Behavioral Economics

JEL Classification: K12, D03