Cryptographic Commitment and Simultaneous Exchange
37 Pages Posted: 1 Jul 2008 Last revised: 20 Dec 2008
Date Written: Dec 18, 2008
Simultaneous exchange of valuable secrets is problematic without use of a trusted intermediary. Examples include trade between strangers involving the transfer of property rights at a distance by exchange of emails, and simultaneous signing of contracts. There is a danger that the first person to commit to the transaction will lose everything if the other party does not reciprocate. We study information exchange mechanisms that establish credible simultaneous commitment and implement individually rational exchange without using an intermediary.
Keywords: simultaneous exchange, trade in information, cryptographic cheap talk, incremental commitment
JEL Classification: C72, D82, D83
Suggested Citation: Suggested Citation