TY - JOUR
T1 - Product market competition with crypto tokens and smart contracts
AU - Chod, Jiri
AU - Lyandres, Evgeny
N1 - Publisher Copyright:
© 2023 Elsevier B.V.
PY - 2023/7
Y1 - 2023/7
N2 - This paper models benefits of quoting output price in units of crypto token under duopolistic product market competition with switching costs. Pricing output in tokens provides a firm with a de facto second-mover advantage, raising its equilibrium profit. In addition, the firm can further increase its equilibrium profit by committing via a smart contract to the number of tokens sold. By focusing on utility tokens used at the product market competition stage, the paper highlights potential benefits of issuing crypto tokens that extend beyond the advantages of issuing security tokens at the venture financing stage.
AB - This paper models benefits of quoting output price in units of crypto token under duopolistic product market competition with switching costs. Pricing output in tokens provides a firm with a de facto second-mover advantage, raising its equilibrium profit. In addition, the firm can further increase its equilibrium profit by committing via a smart contract to the number of tokens sold. By focusing on utility tokens used at the product market competition stage, the paper highlights potential benefits of issuing crypto tokens that extend beyond the advantages of issuing security tokens at the venture financing stage.
KW - Crypto tokens
KW - Product market competition
KW - Smart contracts
KW - Switching costs
UR - http://www.scopus.com/inward/record.url?scp=85156254247&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2023.04.011
DO - 10.1016/j.jfineco.2023.04.011
M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???
AN - SCOPUS:85156254247
SN - 0304-405X
VL - 149
SP - 73
EP - 91
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 1
ER -