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The evolution of the exchange process: from the decentralized to the distributed digital exchange

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  • Yuji Aruka

    (Chuo University)

Abstract

There exists an ambiguous attitude in economic theory toward referring to the details of exchange mechanisms as a social system. To date, in classical theories, the main research target has been the exchange mechanism for commodities in general. Instead of studying the exchange of the broader social or community system, recently, much work has focused on auction mechanisms for particular goods in the context of experimental design. However, the advent of the community currency and crypto-currency suggests that we should study the feasibility and sustainability of the broader system. In this article, we will focus on systems of exchange with auctioneers and without auctioneers. We then examine the properties of bilateral exchange between randomly selected traders without auctioneers and explore the resulting properties of iterations of such transactions. Finally, we mention special issues of cryptocurrency in the face of the Byzantine General Problem and discuss a well-coordinated distributed system involving digital tools such as blockchain.

Suggested Citation

  • Yuji Aruka, 2020. "The evolution of the exchange process: from the decentralized to the distributed digital exchange," Evolutionary and Institutional Economics Review, Springer, vol. 17(2), pages 379-398, July.
    • Handle: RePEc:spr:eaiere:v:17:y:2020:i:2:d:10.1007_s40844-020-00183-0
    DOI: 10.1007/s40844-020-00183-0
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    References listed on IDEAS

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    1. Mirowski, Philip, 2007. "Markets come to bits: Evolution, computation and markomata in economic science," Journal of Economic Behavior & Organization, Elsevier, vol. 63(2), pages 209-242, June.
    2. Ingraham Allan T, 2005. "A Test for Collusion between a Bidder and an Auctioneer in Sealed-Bid Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-34, September.
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    4. Wright, Ian, 2005. "The social architecture of capitalism," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 346(3), pages 589-620.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Makoto Nishibe, 2020. "Special issue “New Possibility of Cryptocurrencies and Digital-Community Currencies”," Evolutionary and Institutional Economics Review, Springer, vol. 17(2), pages 313-325, July.

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    More about this item

    Keywords

    Exchange with auctioneers; Exchange without auctioneers; Computational complexity; Blockchain; Byzantine generals problem; Distributed ledger technologies (DLT); Smart contract; P2P-based auction;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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