Identity As Input to Exchange

20 Pages Posted: 15 May 2018 Last revised: 18 May 2018

Alastair Berg

RMIT University - School of Economics, Finance and Marketing

Chris Berg

RMIT University - School of Economics, Finance and Marketing

Sinclair Davidson

RMIT University - School of Economics, Finance and Marketing

Jason Potts

RMIT University

Date Written: May 2, 2018

Abstract

Identity is an integral part of all but the most trivial economic, social and political transactions. Using transaction cost economics, we determine that identity costs are a distinct and measurable subset of transaction costs. In certain transactions, such as credit arrangements, identity costs are incurred at considerable expense for commercial and compliance based reasons. Vertical integration can be seen through the lens of identity cost economizing, including in the financial sector, due to high costs of complying with KYC regulations as well as commercial risk management. Such organisational structure is also contingent on available identity technologies. The introduction of blockchain and distributed ledger technologies in identity applications may see new models of institutional structures develop.

Keywords: Identity, Blockchain, Transaction Cost Economics, New Institutional Economics

JEL Classification: B52, D02, D23

Suggested Citation

Berg, Alastair and Berg, Chris and Davidson, Sinclair and Potts, Jason, Identity As Input to Exchange (May 2, 2018). Available at SSRN: https://ssrn.com/abstract=3171960 or http://dx.doi.org/10.2139/ssrn.3171960

Alastair Berg (Contact Author)

RMIT University - School of Economics, Finance and Marketing ( email )

Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Chris Berg

RMIT University - School of Economics, Finance and Marketing ( email )

Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Sinclair Davidson

RMIT University - School of Economics, Finance and Marketing ( email )

445 Swanston Street
Melbourne, Victoria 3000
Australia
+61-3-9925-5869 (Phone)
+61-3-9925-5986 (Fax)

Jason Potts

RMIT University ( email )

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