@article{a29bf4cd6de84c319798d3eb4e2536d5,
title = "Product market competition with crypto tokens and smart contracts",
abstract = "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.",
keywords = "Crypto tokens, Product market competition, Smart contracts, Switching costs",
author = "Jiri Chod and Evgeny Lyandres",
note = "Funding Information: Ron Kaniel was the editor for this article. We thank the editor, the anonymous referee, Rui Albuquerque, Andrea Buffa, Will Cong, Hanna Halaburda, Sofia Johan, Jiasun Li, Andrey Malenko, Roni Michaely, Christian Opp, Stefan Petry, Gordon Phillips, Fahad Saleh, Gustavo Schwenkler, Bill Schwert, Lucy White, Luana Zaccaria, Peter Zimmerman, seminar participants at Boston College, Boston University, Cornell University, Florida Atlantic University, Sun Yat-sen University, Tel Aviv University, and University of Rochester, and participants of the 2019 University of Southern Denmark Workshop on the Firm{\textquoteright}s Life Cycle, 2019 Jerusalem Summer Finance Conference, 2019 Columbia University New Technologies in Finance Conference, 2020 Northern Finance Association Conference, 2020 Tokenomics Conference, 2020 Bergen Fintech Conference, and 2020 Paris Fintech and CryptoFinance Conference for valuable comments and suggestions. Evgeny Lyandres is grateful to the Blockchain Research Institute at Tel Aviv University and to the Coller Foundation for providing financial support for this project. Funding Information: ☆ Ron Kaniel was the editor for this article. We thank the editor, the anonymous referee, Rui Albuquerque, Andrea Buffa, Will Cong, Hanna Halaburda, Sofia Johan, Jiasun Li, Andrey Malenko, Roni Michaely, Christian Opp, Stefan Petry, Gordon Phillips, Fahad Saleh, Gustavo Schwenkler, Bill Schwert, Lucy White, Luana Zaccaria, Peter Zimmerman, seminar participants at Boston College, Boston University, Cornell University, Florida Atlantic University, Sun Yat-sen University, Tel Aviv University, and University of Rochester, and participants of the 2019 University of Southern Denmark Workshop on the Firm's Life Cycle, 2019 Jerusalem Summer Finance Conference, 2019 Columbia University New Technologies in Finance Conference, 2020 Northern Finance Association Conference, 2020 Tokenomics Conference, 2020 Bergen Fintech Conference, and 2020 Paris Fintech and CryptoFinance Conference for valuable comments and suggestions. Evgeny Lyandres is grateful to the Blockchain Research Institute at Tel Aviv University and to the Coller Foundation for providing financial support for this project. Publisher Copyright: {\textcopyright} 2023 Elsevier B.V.",
year = "2023",
month = jul,
doi = "10.1016/j.jfineco.2023.04.011",
language = "English",
volume = "149",
pages = "73--91",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
}