Smart Contracts and Transaction Costs

20 Pages Posted: 16 Nov 2018 Last revised: 16 Apr 2020

See all articles by Massimiliano Vatiero

Massimiliano Vatiero

Università della Svizzera italiana; University of Trento

Date Written: September 25, 2018


Over the last years, with the sudden and rising appeal of blockchain technology, some scholars have begun to investigate smart contracts, namely blockchain-enforced agreements. According to enthusiastic (and naïve) views, smart contracts are supposed to allow parties to conduct transactions more efficiently than traditional or semantic contracts. This paper challenges that claim. I argue that because of the need for an efficiency-enhancing adaptation of institutional arrangements—a chief problem of transaction cost economics—smart contracts may incur higher transaction costs than semantic contracts.

Keywords: Adaptation, Blockchain, Enforcement, Incomplete contracts, Smart contracts, Transaction costs

JEL Classification: D23, D86, L14, L86, O33

Suggested Citation

Vatiero, Massimiliano, Smart Contracts and Transaction Costs (September 25, 2018). Available at SSRN: or

Massimiliano Vatiero (Contact Author)

Università della Svizzera italiana ( email )

Via Giuseppe Buffi, n. 13
Lugano, Ticino 6900

University of Trento ( email )

Via Inama, 5
Trento, Trento 38122

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics