The evolution of the exchange process: from the decentralized to the distributed digital exchange
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The evolution of the exchange process: from the decentralized to the distributed digital exchange Yuji Aruka1
© Japan Association for Evolutionary Economics 2020
Abstract There exists an ambiguous attitude in economic theory toward referring to the details of exchange mechanisms as a social system. To date, in classical theories, the main research target has been the exchange mechanism for commodities in general. Instead of studying the exchange of the broader social or community system, recently, much work has focused on auction mechanisms for particular goods in the context of experimental design. However, the advent of the community currency and crypto-currency suggests that we should study the feasibility and sustainability of the broader system. In this article, we will focus on systems of exchange with auctioneers and without auctioneers. We then examine the properties of bilateral exchange between randomly selected traders without auctioneers and explore the resulting properties of iterations of such transactions. Finally, we mention special issues of cryptocurrency in the face of the Byzantine General Problem and discuss a well-coordinated distributed system involving digital tools such as blockchain. Keywords Exchange with auctioneers · Exchange without auctioneers · Computational complexity · Blockchain · Byzantine generals problem · Distributed ledger technologies (DLT) · Smart contract · P2P-based auction JEL Classification A10 · D10 · D20 · D50 · D70 (A10 General Economics: General · D10 Household Behavior: General · D20 Production and Organizations: General · D50 General Equilibrium and Disequilibrium: General · D70 Analysis of Collective Decision-Making: General )
This paper is an extended version of Aruka (2019), the part of which was presented by the author at 5th Biennial RAMICS International Congress in Japan (Hida-Takayama) * Yuji Aruka [email protected]‑u.ac.jp; [email protected] 1
Institute of Economic Research, Chuo University, Hachioji, Tokyo, Japan
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Evolutionary and Institutional Economics Review
1 The landscape of the exchange system The classical image of market exchange has been drastically changed recently. Mirowski (2007) described that a market is repeatedly either spun off or complemented from the underlying market forming a highly complicated layered system in the evolution of market. This may be an essential concept for understanding the modern market system. On the other hand, a series of new exchange mechanisms has appeared. In this article, we focus on these new events to depict the modern market reconstruction. Thus, we first follow the traditional subject of classical exchange with an auctioneer. Before going further into the details, we roughly describe the landscape of exchange systems. Here, we utilize some auxiliary ideas to classify systems dealing with of market exchanges. These system are constructed and construed by Artificial Intelligence (AI). The remarkable operation of AI will be revealed by the speed of coordinations and tra
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