A Solomonic Solution to Ownership Disputes: Theory and Applications

Abstract

This paper examines mechanisms that can resolve ownership disputes where the agents involve know who the legitimate owner is but others do not. The mechanism proposed is called ``Solomonic" because it resolves the biblical dispute facing King Solomon over the true mother of a baby. The mechanism involves two stages of messages (claims) and yields truthful revelation using only ordinal restrictions on preferences. Due to its simplicity, we show how the mechanism can be applied to the problems of Twitter impersonation, domain name disputes, blockchain front-running and blockchain forks.

Keywords: subgame perfect implementation, front-running, mechanism design, ownership, dispute resolution

JEL Classification: D02, K11