Blockchains can change the way we collaborate

They are particularly effective when collaboration conditions can be formalised and made explicit, write Fabrice Lumineau, Wenqian Wang and Oliver Schilke

 
Blockchains are disrupting the business world, and their impact on the global economy will only continue to grow over the next decade, according to a recent study by PwC. While blockchains have previously been used mainly in the financial sector, they are becoming more and more widespread across all kinds of industries. But what changes do they bring to the table? What is it about blockchains that is new and different? In our recent research article, we argue that blockchains may help address key challenges inherent in interpersonal and interorganisational collaborations.

Successful collaborations often do not come naturally. Partners may lack commitment, or they may even lie, steal, or cheat. For example, people may deliberately provide twisted information to gain an advantage, and it can be costly for their counterpart to corroborate the truth. Moreover, even if partners are completely honest, it is still often challenging to communicate and share information in a clear way to coordinate actions with one another.

Traditionally, people use legal contracts with their collaborating parties to address these challenges of cooperation and coordination. When disputes occur, they rely on the court to settle the dispute and enforce the agreement. They also rely on the contract as a mutual reference point to guide their actions. An alternative to legal contracts are social mechanisms. Business actors are involved in longer-term social relations, allowing them to develop expectations about their partners’ trustworthiness on the basis of their past interactions. They can also use social sanctions, such as the threat of terminating the collaboration and all future interactions, to steer their partners’ behaviours.

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Πηγή: blogs.lse.ac.uk

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