Economics and Finance of Decentralized Organizations - Revision history

Tebaldi: /* COSTS AND BENEFITS OF DECENTRALIZATION */

2023-09-16T10:02:22Z

COSTS AND BENEFITS OF DECENTRALIZATION

← Older revision		Revision as of 10:02, 16 September 2023
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	In fact, fragmentation and pitfalls of the decentralization are well studied in the financial economic literature. According to this view, decentralization of funding and decision powers are second best outcomes with respect a centralized first best. Decentralization implies financial fragility, lower financial capacity, and higher monitoring costs.		In fact, fragmentation and pitfalls of the decentralization are well studied in the financial economic literature. According to this view, decentralization of funding and decision powers are second best outcomes with respect a centralized first best. Decentralization implies financial fragility, lower financial capacity, and higher monitoring costs.

	A more recent literature, see Aghion et al. (2014)<ref>Aghion, Phillipe, Nicholas Bloom, and John Van Reenen. "Incomplete contracts and the internal organization of firms." ''The Journal of Law, Economics, & Organization'' 30, no. suppl_1 (2014): i37-i63.</ref>, Bloom et al. (2012<ref>Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. "The organization of firms across countries." ''The quarterly journal of economics'' 127, no. 4 (2012): 1663-1705.</ref> and 2017<ref>Turbulence, ~~Firm Decentralization~~ and ~~Growth~~ in ~~Bad Times~~</ref>), have explored on empirical grounds the determinants of decentralization statements and found a more heterogeneous landscape. They observe that:		A more recent literature, see Aghion et al. (2014)<ref>Aghion, Phillipe, Nicholas Bloom, and John Van Reenen. "Incomplete contracts and the internal organization of firms." ''The Journal of Law, Economics, & Organization'' 30, no. suppl_1 (2014): i37-i63.</ref>, Bloom et al. (2012<ref>Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. "The organization of firms across countries." ''The quarterly journal of economics'' 127, no. 4 (2012): 1663-1705.</ref> and 2017<ref>Aghion, Philippe, Nicholas Bloom, Brian Lucking, Raffaella Sadun, and John Van Reenen. "Turbulence, firm decentralization, and growth in bad times." ''American Economic Journal: Applied Economics'' 13, no. 1 (2021): 133-169.</ref>), have explored on empirical grounds the determinants of decentralization statements and found a more heterogeneous landscape. They observe that:

	* increasing levels of competition, human capital, and IT promote decentralization.		* increasing levels of competition, human capital, and IT promote decentralization.

Tebaldi: /* WHY DLT MIGHT BE USEFUL TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS */

2023-09-03T19:45:53Z

WHY DLT MIGHT BE USEFUL TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS

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	==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====		==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====

	=== WHY ~~DLT~~ MIGHT BE USEFUL TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS ===		=== WHY DECENTRALIZATION MIGHT BE USEFUL TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS ===
	In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects. Hence it is necessary to identify, if any, the foundational reasons suggesting that decentralized solutions relying on the new available technologies may improve social welfare.		In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects. Hence it is necessary to identify, if any, the foundational reasons suggesting that decentralized solutions relying on the new available technologies may improve social welfare.

Tebaldi: /* GOOG ARGUMENTS SUPPORTING THE ADOPTION OF DECENTRALIZED TECHNOLOGIES TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS (SDG) */

2023-09-03T19:45:24Z

GOOG ARGUMENTS SUPPORTING THE ADOPTION OF DECENTRALIZED TECHNOLOGIES TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS (SDG)

← Older revision		Revision as of 19:45, 3 September 2023
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	==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====		==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====

	=== ~~GOOG ARGUMENTS SUPPORTING THE ADOPTION OF DECENTRALIZED TECHNOLOGIES~~ TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS ~~(SDG)~~ ===		=== WHY DLT MIGHT BE USEFUL TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS ===
	In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects. Hence it is necessary to identify, if any, the foundational reasons suggesting that decentralized solutions relying on the new available technologies may improve social welfare.		In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects. Hence it is necessary to identify, if any, the foundational reasons suggesting that decentralized solutions relying on the new available technologies may improve social welfare.

Tebaldi: /* GOOG ARGUMENTS SUPPORTING THE ADOPTION OF DECENTRALIZED TECHNOLOGIES TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS (SDG) */

2023-09-03T15:11:16Z

GOOG ARGUMENTS SUPPORTING THE ADOPTION OF DECENTRALIZED TECHNOLOGIES TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS (SDG)

← Older revision		Revision as of 15:11, 3 September 2023
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	A second independent motivation to promote decentralized organizations aimed at achieving sustainable development goals, is related with the possibility that existing decentralized firm networks can work '''as information aggregators''' and, relying on DLT and oracle technologies, these decentralized networks may improve the ability to monitor and screen the existing attempts to achieve the SDG goals reducing the long-term cost of capital for those producers that comply with the SDG policies.		A second independent motivation to promote decentralized organizations aimed at achieving sustainable development goals, is related with the possibility that existing decentralized firm networks can work '''as information aggregators''' and, relying on DLT and oracle technologies, these decentralized networks may improve the ability to monitor and screen the existing attempts to achieve the SDG goals reducing the long-term cost of capital for those producers that comply with the SDG policies.

	Last but not least, a third good reason to rely on decentralized technologies to coordinate firm networks, is related with a simple long-term risk reduction. In fact, a firm network coordinated by a DLT technology may '''reduce the exposure to idiosyncratic risks''' that may affect innovative projects. In fact DLT might provide a good distribution of funds within a network of firms while granting that the development of the global projects is insured with respect to the counterparty risk of individual firms that are part of the network. In fact, a decentralized organization that preserves the right to exclude a specific producer or developer can achieve an optimal risk hedging policy of the ~~default~~ risk of individual firms that are part of the network		Last but not least, a third good reason to rely on decentralized technologies to coordinate firm networks, is related with a simple long-term risk reduction. In fact, a firm network coordinated by a DLT technology may '''reduce the exposure to idiosyncratic risks''' that may affect innovative projects. In fact DLT might provide a good distribution of funds within a network of firms while granting that the development of the global projects is insured with respect to the counterparty risk of individual firms that are part of the network. In fact, a decentralized organization that preserves the right to exclude a specific producer or developer can achieve an '''optimal risk hedging policy''' with respect to the counterparty risk of individual firms that are part of the network.

	== Bibliography ==		== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]

Tebaldi: /* APPLICATIONS OF DECENTRALIZED TECHNOLOGIES TO GREENTECH */

2023-09-03T15:08:07Z

APPLICATIONS OF DECENTRALIZED TECHNOLOGIES TO GREENTECH

← Older revision		Revision as of 15:08, 3 September 2023
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	==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====		==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====

	=== ~~APPLICATIONS~~ OF DECENTRALIZED TECHNOLOGIES TO ~~GREENTECH~~ ===		=== GOOG ARGUMENTS SUPPORTING THE ADOPTION OF DECENTRALIZED TECHNOLOGIES TO ACHIEVE SUSTAINABLE DEVELOPMENT GOALS (SDG) ===
	In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects.		In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects. Hence it is necessary to identify, if any, the foundational reasons suggesting that decentralized solutions relying on the new available technologies may improve social welfare.

			As a good starting point, it is important to recall that according to the traditional economic approach, the emergence of a suitable system of prices promotes a decentralized efficient allocation of private goods. Correspondingly, the creation of '''new markets''' to share the long-term systematic risks arising from GreenHouseGas (GHG hereafter) emissions offer a potentially interesting application of blockchain technologies. This is one of the goals that are within the targets of the emerging area of Decentralized Finance that relies on public blockchain infrastructures

			A second independent motivation to promote decentralized organizations aimed at achieving sustainable development goals, is related with the possibility that existing decentralized firm networks can work '''as information aggregators''' and, relying on DLT and oracle technologies, these decentralized networks may improve the ability to monitor and screen the existing attempts to achieve the SDG goals reducing the long-term cost of capital for those producers that comply with the SDG policies.

			Last but not least, a third good reason to rely on decentralized technologies to coordinate firm networks, is related with a simple long-term risk reduction. In fact, a firm network coordinated by a DLT technology may '''reduce the exposure to idiosyncratic risks''' that may affect innovative projects. In fact DLT might provide a good distribution of funds within a network of firms while granting that the development of the global projects is insured with respect to the counterparty risk of individual firms that are part of the network. In fact, a decentralized organization that preserves the right to exclude a specific producer or developer can achieve an optimal risk hedging policy of the default risk of individual firms that are part of the network

	== Bibliography ==		== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]

Tebaldi: /* Trust and confidence */

2023-08-30T22:34:21Z

Trust and confidence

← Older revision		Revision as of 22:34, 30 August 2023
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	=== THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. ===		=== THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. ===
	In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations.		In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations. When considering a specific range of potential applications, it is necessary to consider the most appropriate [[BLOCKCHAIN ARCHITECTURE FOR CORPORATE FINANCE\|architecture]] that can be adopted.

	The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. This original application is now only one of the many potential applications that are being explored. An interesting, more comprehensive perspective on the potential applications of the blockchain technology is the one that emphasizes its role as a technology that can be used to enforce trust in economic transactions.<ref>Werbach, K., 2018. ''The blockchain and the new architecture of trust''. Mit Press.</ref> While we refrain from the oversimplistic narratives that sell the blockchain technology as a 'trustless' technology, it is true that the use of decentralized validation approaches, of smart contracts and of decentralized remuneration mechanisms may be used to implement credible mechanisms and provide economic incentives.		The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. This original application is now only one of the many potential applications that are being explored. An interesting, more comprehensive perspective on the potential applications of the blockchain technology is the one that emphasizes its role as a technology that can be used to enforce trust in economic transactions.<ref>Werbach, K., 2018. ''The blockchain and the new architecture of trust''. Mit Press.</ref> While we refrain from the oversimplistic narratives that sell the blockchain technology as a 'trustless' technology, it is true that the use of decentralized validation approaches, of smart contracts and of decentralized remuneration mechanisms may be used to implement credible mechanisms and provide economic incentives.

	Theoretical and empirical evidence emphasizing the pivotal role that trust and incentives play in modern markets and economic systems and the potential benefits deriving from the adoption of the blockchain technology are ~~breifly~~ reviewed in the following:		Theoretical and empirical evidence emphasizing the pivotal role that trust and incentives play in modern markets and economic systems and the potential benefits deriving from the adoption of the blockchain technology are briefly reviewed in the following:

			==== [[TRUST AND CONFIDENCE AND THEIR RELATION TO BLOCKCHAIN TECHNOLOGIES]] ====

			=== APPLICATIONS OF DECENTRALIZED TECHNOLOGIES TO GREENTECH ===
			In the present project, in particular, we are interested in the potential use of these technologies to enforce trust in economic projects and securities that are aimed at implementing sustainability projects.

	~~=== Trust and confidence ===~~
	~~When considering a specific range of potential applications, it is necessary to consider the most appropriate [[BLOCKCHAIN ARCHITECTURE FOR CORPORATE FINANCE\|architecture]] that can be adopted and~~
	== Bibliography ==		== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]

Tebaldi: /* THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. */

2023-08-30T21:39:16Z

THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY.

← Older revision		Revision as of 21:39, 30 August 2023
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	=== THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. ===		=== THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. ===
	In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations.		In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations.

	~~When considering~~ a ~~specific range~~ of potential applications, it is ~~necessary~~ to ~~consider~~ the ~~most appropriate [[BLOCKCHAIN ARCHITECTURE FOR CORPORATE FINANCE\|~~architecture]] that ~~can~~ be ~~adopted~~.		The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. This original application is now only one of the many potential applications that are being explored. An interesting, more comprehensive perspective on the potential applications of the blockchain technology is the one that emphasizes its role as a technology that can be used to enforce trust in economic transactions.<ref>Werbach, K., 2018. ''The blockchain and the new architecture of trust''. Mit Press.</ref> While we refrain from the oversimplistic narratives that sell the blockchain technology as a 'trustless' technology, it is true that the use of decentralized validation approaches, of smart contracts and of decentralized remuneration mechanisms may be used to implement credible mechanisms and provide economic incentives.

			Theoretical and empirical evidence emphasizing the pivotal role that trust and incentives play in modern markets and economic systems and the potential benefits deriving from the adoption of the blockchain technology are breifly reviewed in the following:

			=== Trust and confidence ===
			When considering a specific range of potential applications, it is necessary to consider the most appropriate [[BLOCKCHAIN ARCHITECTURE FOR CORPORATE FINANCE\|architecture]] that can be adopted and
	== Bibliography ==		== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]

Tebaldi: /* THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. */

2023-08-28T22:02:47Z

THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY.

← Older revision		Revision as of 22:02, 28 August 2023
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	In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations.		In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations.

	When considering a specific range of potential applications, it is necessary to consider the most appropriate architecture that can be adopted.		When considering a specific range of potential applications, it is necessary to consider the most appropriate [[BLOCKCHAIN ARCHITECTURE FOR CORPORATE FINANCE\|architecture]] that can be adopted.


	== Bibliography ==		== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]

Tebaldi at 22:01, 28 August 2023

2023-08-28T22:01:28Z

← Older revision		Revision as of 22:01, 28 August 2023
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	Vergne et al. (2020)<ref>Vergne, Jean-Philippe. "Decentralized vs. distributed organization: Blockchain, machine learning and the future of the digital platform." ''Organization Theory'' 1, no. 4 (2020): 2631787720977052.</ref> observe that decentralization may identify two distinct phenomena: dispersion of organizational communications or the dispersion of organizational decision-making. This proposed distinction has implications for understanding the growth of digital platforms in the already developed so called Web 2.0. Prominent existing platforms have a dispersed model for communications since they typically use machine learning as their core technology to transform inputs (e.g. data) into outputs (e.g. matchmaking services) but retain a centralized decision-making model. On the contrary, they argue that platform based on blockchain that emerged after the definition of the bitcoin protocol, offer an alternative technological blueprint enabling platforms that are both decentralized and distributed. They claim that the adoption of the distributed ledger technologies might offer a viable solution to reduce the “''increasing centralization of data within a handful of platform behemoths''”. Their antitrust recommendations would act “''at the data level and formulate actionable policy recommendations to level the competitive playing field – after acknowledging the dual tension between legal and illegal (or ‘pirate’) competition, and between centralized and decentralized platforms''”.		Vergne et al. (2020)<ref>Vergne, Jean-Philippe. "Decentralized vs. distributed organization: Blockchain, machine learning and the future of the digital platform." ''Organization Theory'' 1, no. 4 (2020): 2631787720977052.</ref> observe that decentralization may identify two distinct phenomena: dispersion of organizational communications or the dispersion of organizational decision-making. This proposed distinction has implications for understanding the growth of digital platforms in the already developed so called Web 2.0. Prominent existing platforms have a dispersed model for communications since they typically use machine learning as their core technology to transform inputs (e.g. data) into outputs (e.g. matchmaking services) but retain a centralized decision-making model. On the contrary, they argue that platform based on blockchain that emerged after the definition of the bitcoin protocol, offer an alternative technological blueprint enabling platforms that are both decentralized and distributed. They claim that the adoption of the distributed ledger technologies might offer a viable solution to reduce the “''increasing centralization of data within a handful of platform behemoths''”. Their antitrust recommendations would act “''at the data level and formulate actionable policy recommendations to level the competitive playing field – after acknowledging the dual tension between legal and illegal (or ‘pirate’) competition, and between centralized and decentralized platforms''”.

			=== THE VALUE ADDED FROM DISTRIBUTED LEDGER TECHNOLOGY. ===
			In order to clarify the goals of the project, it is worth listing the potential economic advantages that may derive from the adoption of DLT. It is important to remark that the diffusion of cryptocurrencies and of the public blockchain models have obscured a number of important alternative applications of this technology that on the contrary may play central roles when applied to existing decentralized organizations.

			When considering a specific range of potential applications, it is necessary to consider the most appropriate architecture that can be adopted.


	== Bibliography ==		== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]

Tebaldi at 21:28, 23 August 2023

2023-08-23T21:28:23Z

← Older revision		Revision as of 21:28, 23 August 2023
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	Vergne et al. (2020)<ref>Vergne, Jean-Philippe. "Decentralized vs. distributed organization: Blockchain, machine learning and the future of the digital platform." ''Organization Theory'' 1, no. 4 (2020): 2631787720977052.</ref> observe that decentralization may identify two distinct phenomena: dispersion of organizational communications or the dispersion of organizational decision-making. This proposed distinction has implications for understanding the growth of digital platforms in the already developed so called Web 2.0. Prominent existing platforms have a dispersed model for communications since they typically use machine learning as their core technology to transform inputs (e.g. data) into outputs (e.g. matchmaking services) but retain a centralized decision-making model. On the contrary, they argue that platform based on blockchain that emerged after the definition of the bitcoin protocol, offer an alternative technological blueprint enabling platforms that are both decentralized and distributed. They claim that the adoption of the distributed ledger technologies might offer a viable solution to reduce the “''increasing centralization of data within a handful of platform behemoths''”. Their antitrust recommendations would act “''at the data level and formulate actionable policy recommendations to level the competitive playing field – after acknowledging the dual tension between legal and illegal (or ‘pirate’) competition, and between centralized and decentralized platforms''”.		Vergne et al. (2020)<ref>Vergne, Jean-Philippe. "Decentralized vs. distributed organization: Blockchain, machine learning and the future of the digital platform." ''Organization Theory'' 1, no. 4 (2020): 2631787720977052.</ref> observe that decentralization may identify two distinct phenomena: dispersion of organizational communications or the dispersion of organizational decision-making. This proposed distinction has implications for understanding the growth of digital platforms in the already developed so called Web 2.0. Prominent existing platforms have a dispersed model for communications since they typically use machine learning as their core technology to transform inputs (e.g. data) into outputs (e.g. matchmaking services) but retain a centralized decision-making model. On the contrary, they argue that platform based on blockchain that emerged after the definition of the bitcoin protocol, offer an alternative technological blueprint enabling platforms that are both decentralized and distributed. They claim that the adoption of the distributed ledger technologies might offer a viable solution to reduce the “''increasing centralization of data within a handful of platform behemoths''”. Their antitrust recommendations would act “''at the data level and formulate actionable policy recommendations to level the competitive playing field – after acknowledging the dual tension between legal and illegal (or ‘pirate’) competition, and between centralized and decentralized platforms''”.

			== Bibliography ==
	[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]		[[Category:MUSA Tech4Fin_Milestone_1]][[Category:MUSA Financial Economics]]