Product market competition with crypto tokens and smart contracts

Jiri Chod, Evgeny Lyandres

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)73-91
Number of pages19
JournalJournal of Financial Economics
Publication statusPublished - Jul 2023
Externally publishedYes


  • Crypto tokens
  • Product market competition
  • Smart contracts
  • Switching costs

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