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Transaction fee mechanisms robust to welfare-increasing collusion

Author

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  • Gafni, Yotam
  • Yaish, Aviv

Abstract

To allocate transactions to blocks, cryptocurrencies use auction-esque transaction fee mechanisms (TFMs). A conjecture of Roughgarden (2024) asks whether there is a TFM that is incentive compatible for both users and the miner and is also resistant to a collusion that allows them to jointly increase overall welfare. We resolve this question in the negative for deterministic TFMs, through a comprehensive characterization of designs robust to this form of collusion. For randomized TFMs, we show limits on the efficiency they can achieve.

Suggested Citation

  • Gafni, Yotam & Yaish, Aviv, 2026. "Transaction fee mechanisms robust to welfare-increasing collusion," Games and Economic Behavior, Elsevier, vol. 157(C), pages 351-375.
    • Handle: RePEc:eee:gamebe:v:157:y:2026:i:c:p:351-375
    DOI: 10.1016/j.geb.2026.02.005
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    References listed on IDEAS

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