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Does the Blockchain Technology Help to Reduce Information Asymmetries

Author

Listed:
  • Papatya Duman

    (Universität Bielefeld)

  • Claus-Jochen Haake

    (Universität Paderborn)

  • Alexander Koch

    (Universität Paderborn)

  • Sarah Kühn

    (Universität Paderborn)

  • Simon Hemmrich

    (Universität Paderborn)

  • Daniel Beverungen

    (Universität Paderborn)

Abstract

We examine the problem faced by a buyer seeking to purchase an experience good without prior knowledge of its stochastic quality. An expert who owns the product can be paid to provide a signal about its quality. Our analysis explores the impact of introducing a credible signaling mechanism for the buyer. Specifically, we propose using blockchain technology, which ensures immutability, decentralization, privacy, and transparency, to store the signal. Our findings reveal that this approach reduces the number of possible equilibria while preserving the “good equilibrium”, in which information is both acquired and accurately transmitted. Consequently, the use of blockchain tech-nology mitigates the equilibrium coordination problem and improves the provision of credible information.

Suggested Citation

  • Papatya Duman & Claus-Jochen Haake & Alexander Koch & Sarah Kühn & Simon Hemmrich & Daniel Beverungen, 2025. "Does the Blockchain Technology Help to Reduce Information Asymmetries," Working Papers Dissertations 152, Paderborn University, Faculty of Business Administration and Economics.
    • Handle: RePEc:pdn:dispap:152
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    File URL: http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP152.pdf
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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