Abstract:
The existing literature on trading-favor systems, or scrip systems, generally assumes a fixed set of participants. We study the design of a trading-favor system that allows participants to join and exit. We examine how the dynamics of participation create challenges to participants' strategies and, consequently, the design of the system. We introduce a token exchange mechanism that can be implemented by simple smart contracts. Such mechanism can regulate token distribution, evaluate token value and fairly adjust the total number of tokens in circulation. We show that the mechanism can induce participants to adopt an always-trade strategy in equilibrium, resulting in robust and highly efficient resource sharing in the decentralized system.
About the Speaker:
Prof. Hu is an associate professor at the Business School of the University of Hong Kong. Her expertise includes the design and operations of platforms and sharing economies, online retail operations such as dynamic pricing, revenue management, models of incentives and strategic interactions. Her research on these topics has been published in top-tier research journals including Management Science, Operations Research, and Manufacturing & Service Operations Management, etc. She received her Ph.D. from the Stern School of Business at New York University and obtained her Bachelor of Science in Mathematics from the School of Mathematical Sciences at Peking University.
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