Sharing Sequentially Triggered Losses: Automated Conflict Resolution Through Smart Contracts
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AbstractWhen actions by one agent force another to deviate from their agreements with a third, “victim” turns into “injurer” in the chain’s subsequent steps. Should the chain’s initiator be responsible only for the direct harm they cause or also bear some of the indirect losses they trigger? Through an axiomatic approach, we characterize the class of fixed-fraction rules, which strike a balance between incentives for accident prevention on the one hand and fairness in terms of how liabilities are assigned on the other. Their simple design make the rules ideal for practical implementation through smart contracts, enabling automated conflict resolution.
Acceptance Date29/03/2023
All Author(s) ListJens Gudmundsson, Jens Leth Hougaard, Chiu Yu Ko
Journal nameManagement Science
Year2024
Month3
Volume Number70
Issue Number3
PublisherINFORMS
Pages1773 - 1786
ISSN0025-1909
eISSN1526-5501
LanguagesEnglish-United States