Smart Contracts, Transaction Costs and Adaptation

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Ringvorlesung #9 aus der Reihe "New Frontiers in Law and Economics" von Prof. Dr. Hans-Bernd Schäfer

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 sometimes naïve) views, smart contracts are supposed to allow parties to conduct transactions more efficiently than traditional or semantic contracts. Ass. Prof. Dr. Massimiliano Vatiero's lecture (University of Trento, Department of Economics) challenges that claim. 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.