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Financial Incentives for the Development of Blockchain‐Based Platforms

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  • Andrea Canidio

Abstract

I develop a theoretical model showing that an entrepreneur prefers to create a decentralized digital platform with a crypto‐token as its internal currency (rather than a traditional platform) when the total surplus from trade is low relative to the dollar value of transactions. I then study inefficiencies in the development of such platforms. When external funding is not required, effort may be above or below its efficient level. When external funding is required, multiple Pareto‐ranked equilibria arise: in each, with strictly positive probability, the entrepreneur liquidates his tokens and halts development.

Suggested Citation

  • Andrea Canidio, 2026. "Financial Incentives for the Development of Blockchain‐Based Platforms," Journal of Industrial Economics, Wiley Blackwell, vol. 74(1), pages 34-47, March.
    • Handle: RePEc:bla:jindec:v:74:y:2026:i:1:p:34-47
    DOI: 10.1111/joie.70010
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