Searcharxiv⌕ Search
Home/Archive/arXiv

arXiv · 2512.11739

Analyzing the Economic Impact of Decentralization on Users

Amit Levy·S. Matthew Weinberg·Chenghan Zhou
View original source ↗Read source document ↗Export metadata ↓

Abstract

We model the ultimate price paid by users of a decentralized ledger as resulting from a two-stage game where Miners (/Proposers/etc.) first purchase blockspace via a Tullock contest, and then price that space to users. When analyzing our distributed ledger model, we find: - A characterization of all possible pure equilibria (although pure equilibria are not guaranteed to exist). - A natural sufficient condition, implied by Regularity (a la [Mye81]), for existence of a ''market-clearing'' pure equilibrium where Miners choose to sell all space allocated by the Distributed Ledger Protocol, and that this equilibrium is unique. - The market share of the largest miner is the relevant ''measure of decentralization'' to determine whether a market-clearing pure equilibrium exists. - Block rewards do not impact users' prices at equilibrium, when pure equilibria exist. But, higher block rewards can cause pure equilibria to exist. We also discuss aspects of our model and how they relate to blockchains deployed in practice. For example, only ''patient'' users (who are happy for their transactions to enter the blockchain under any miner) would enjoy the conclusions highlighted by our model, whereas ''impatient'' users (who are interested only for their transaction to be included in the very next block) still face monopoly pricing.

Explore related subjects

cs.GT

Keep this discovery

Explore connections, maps & timelines

BibTeXRIS

Amit Levy, S. Matthew Weinberg, Chenghan Zhou. 2025-12-12. Analyzing the Economic Impact of Decentralization on Users. https://arxiv.org/abs/2512.11739

Cite the original work for its findings. Save a collection to share your selection of sources.

KEEP EXPLORING

Related papers

arXiv2026

MMS Allocation for Chores with Online Agent Arrivals

We study the fair allocation of $m$ indivisible chores to $n$ agents with subadditive cost functions arriving online in an arbitrary order. Upon an agent's arrival, we are informed of her cost function and must irrevocably assign her a set of chores. We focus on the Maximin Share (MMS) fairness notion and aim to compute an allocation in which all items are assigned, and no agent incurs a cost more than $\alpha$ times her MMS. Without any prior information about the instance (other than $n$ and $m$), we design an algorithm with a competitive ratio of $O(\min\{n, k\log^{1+\epsilon}k, \log m\})$ for any constant $\epsilon > 0$, where $k$ denotes the number of cost function types. Our bound matches the best known offline approximation guarantees for MMS under subadditive costs and is nearly optimal with respect to all three parameters: we show that even for binary additive cost functions, no online algorithm can achieve a competitive ratio of $o(\min\{n, k\log k, \log m\})$. We then consider the setting in which the $k$ cost function types are known in advance (though the realized types of arriving agents are not). For additive cost functions, we provide an algorithm with a competitive ratio of $O(\min\{\log k, \log(kn)/\log\log(kn)\})$, and show that constant-competitive algorithms do not exist for general $k$, even for the binary additive setting. For binary additive functions when $k \le n$, we propose a $3$-competitive algorithm and establish a lower bound of $2$.

cs.GT↗
arXiv2026

Truncated Noisy Best-Response Algorithms: Toward Game Theoretic Learning with Safety Guarantees

We consider a game theoretic approach to solve multi-agent coordination problems with submodular maximization objectives. It is known for such problems that the Nash equilibria for the corresponding game are always within 50% of the optimal, but that the equilibria which achieve this worst-case bound are not stable. To exploit this instability, we propose a family of algorithms which we call Truncated Noisy Best-Response (TNBR) Algorithms. These algorithms are flexibly characterized by agents asynchronously and stochastically selecting actions from a neighbourhood of their best response payoffs. We compute bounds on the recurrent classes of TNBR algorithms' associated Markov chains. Our bounds fall into two categories: first, "Performance" bounds ensure that TNBR algorithms always have a high-value recurrent state; second, "Safety" bounds ensure that TNBR algorithms never have arbitrarily-bad recurrent states. Furthermore, these two types of bounds are linked by a waterbed-like effect: every game with a poor Safety guarantee necessarily has a favorable Performance guarantee.

cs.GT↗
arXiv2026

Existence of the Core in Approval-Based Committee Elections

We settle the main open question in the theory of approval-based multi-winner elections: we show that there always exists a committee in the core. The core is a stability and group fairness concept. The proof introduces a new voting rule that optimizes an entropy-like objective function over committees and payment systems. All local optima of this objective function lie in the core, which implies that a core committee can be found in polynomial time.

cs.GT↗