Identity Technologies: A Transaction Cost Approach

14 Pages Posted: 23 Feb 2020

See all articles by Chris Berg

Chris Berg

RMIT University - School of Economics, Finance and Marketing

Sinclair Davidson

RMIT University

Jason Potts

RMIT University

Date Written: January 28, 2020


Identity is an input into economic exchange and contracting. The modern industrial economy has relies on cheap political identity to create trust and lower transaction costs. Market economies, however, have different identity needs than an administrative state. Economic efficiency in a digital economy requires high-quality economic identity to facilitate co-production of value on platforms, and to enable market competition through product-quality discrimination. Blockchain technologies and related advances are bringing innovation to economic identity technology. In this paper we explore state-produced identity and market-produced identity, the dynamics that exist in their demand and supply, how these categories are being shaped by technological change, the implications for privacy and secrecy, and the role of the state in market-produced identity.

Keywords: identity, privacy, institutional economics, technology, blockchain, zero-knowledge proofs

JEL Classification: D02, D04, D18

Suggested Citation

Berg, Chris and Davidson, Sinclair and Potts, Jason, Identity Technologies: A Transaction Cost Approach (January 28, 2020). Available at SSRN: or

Chris Berg (Contact Author)

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

Level 12, 239 Bourke Street
Melbourne, Victoria 3000

Sinclair Davidson

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000

Jason Potts

RMIT University ( email )

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