Blockchain economics and governance design startup Prysm Group has added Nobel Prize laureate Oliver Hart and former Microsoft chief economist Preston McAfee to its senior advisory board.
Prysm assists blockchain startups by providing “counsel in the complex economic fields of contract theory, market design, game theory and social choice. McAfee told CoinDesk that he was “excited” to join the group, adding that “blockchain enables a variety of new business models by permitting decentralization and publication of digital records.”
Moreover, “there is no other mechanism that simultaneously provides decentralization, secure privacy and verifiability,” he said.
“Many blockchain applications involve creating economic systems [or] groups of agents who interact in multiple ways, with distinct roles. The challenge in designing such systems is that they have many interacting parts — various incentives, policing, contract rules, information provision, prices — that need to be simultaneously optimized if good performance is to be achieved.”
In a statement, Hart echoed McAfee’s words, saying it was “important” for the founders of blockchain startups to “understand the possible complications” that can come from creating code to replace traditional institutions and power structures, “so that they can design better systems that are more likely to accomplish their objectives.”
He told CoinDesk that he was “intrigued” by the ways blockchain technology could allow developers to “design better incentives and contracts.”
“Prysm Group is dedicated to the idea that economic principles provide a powerful tool for understanding the issues and I am excited by the prospect of working with them,” he added.
Hart’s statement suggests that there will be some parallels between the project and his past work. Hart and Finnish economist Bengt Holmström won the Nobel Prize in Economic Sciences in 2016 for their work on contract theory.
Oliver Hart image via Bengt Nyman / Wikimedia Commons
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.