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Blockchain and Smart-contract: a pioneering Approach of inter-firms Relationships? The case of franchise networks

Author

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  • Richard Baron

    (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France)

  • Magali Chaudey

    (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France)

Abstract

This paper is interested in the analysis of Blockchains and Smart-contracts applied to inter-firms relationships, in particular the franchise networks. After defining the Blockchain technology and the Smart-contract as a particular type of contract stored in blockchains, we question the theory of contracts and its conception(s) of transactions, information asymmetries, firm or inter-firm relations. To better understand the challenges of blockchain for franchise networks and identify opportunities for implementation in these networks, we present some relevant applications of this technology. We identify different ways where blockchain technology could improve the network management and therefore their performance: the supply-chain, the brand-name protection, security and transparency in the payment of fees and royalties, access to reliable information via an oracle.

Suggested Citation

  • Richard Baron & Magali Chaudey, 2019. "Blockchain and Smart-contract: a pioneering Approach of inter-firms Relationships? The case of franchise networks," Working Papers 1917, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    • Handle: RePEc:gat:wpaper:1917
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    References listed on IDEAS

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    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Lin William Cong & Zhiguo He, 2019. "Blockchain Disruption and Smart Contracts," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1754-1797.
    3. Sothearath Seang & Dominique Torre, 2019. "Proof of Work and Proof of Stake Consensus Protocols: A Blockchain Application for Local Complementary Currencies," GREDEG Working Papers 2019-24, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    4. Oliver Hart, 2017. "Incomplete Contracts and Control," American Economic Review, American Economic Association, vol. 107(7), pages 1731-1752, July.
    5. Davidson, Sinclair & De Filippi, Primavera & Potts, Jason, 2018. "Blockchains and the economic institutions of capitalism," Journal of Institutional Economics, Cambridge University Press, vol. 14(4), pages 639-658, August.
    6. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    7. Massimiliano Vatiero, 2018. "Smart contracts and transaction costs," Discussion Papers 2018/238, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
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    Cited by:

    1. Christian Eckert & Christof Neunsinger & Katrin Osterrieder, 2022. "Managing customer satisfaction: digital applications for insurance companies," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(3), pages 569-602, July.

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    More about this item

    Keywords

    Blockchain; Smart-Contract; Transaction cost; Network; Franchise;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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