Antitrust and Costless Verification: An Optimistic and a Pessimistic View of the Implications of Blockchain Technology

16 Pages Posted: 25 Jun 2018 Last revised: 2 Oct 2018

See all articles by Christian Catalini

Christian Catalini

Massachusetts Institute of Technology (MIT) - Sloan School of Management; Diem Association and Diem Networks US; National Bureau of Economic Research (NBER)

Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS)

Date Written: June 19, 2018

Abstract

Blockchain technology allows a network of individuals, institutions or devices to coordinate economic activity on a global scale ('internet-level consensus') without assigning the same degree of control to the intermediary operating and facilitating transactions in the marketplace. This allows for the creation of new types of decentralized digital platforms where the benefits of network effects are separated from the traditional costs they entail in terms of market power. We discuss both the opportunities and challenges the technology involves from an antitrust perspective, and in particular how it can be used to facilitate the creation of extremely efficient and competitive digital markets, as well as to facilitate collusion and make antitrust enforcement more difficult.

Keywords: blockchain, antitrust, cryptocurrencies, network effects, market power

Suggested Citation

Catalini, Christian and Tucker, Catherine E., Antitrust and Costless Verification: An Optimistic and a Pessimistic View of the Implications of Blockchain Technology (June 19, 2018). MIT Sloan Research Paper No. 5523-18, Available at SSRN: https://ssrn.com/abstract=3199453 or http://dx.doi.org/10.2139/ssrn.3199453

Christian Catalini (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

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HOME PAGE: http://https://mitsloan.mit.edu/faculty/directory/christian-catalini

Diem Association and Diem Networks US ( email )

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National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS) ( email )

100 Main St
E62-536
Cambridge, MA 02142
United States

HOME PAGE: http://cetucker.scripts.mit.edu

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