Electronic Institutions: Future Trends and Challenges

Abstract

There are situations where individuals interact in ways that involve: - Commitment. Interactions usually involve some promises of future actions, payments and transference of property, or other forms of obligations among participants - Delegation. Participants may act in representation of someone else. - Repetition. The same type of interaction is performed repeatedly, possibly involving different individuals, usually involving different items, issues or concerns. - Liability and Risk. The achievement of the interaction involves some sort of interest or gain for participants, and usually some transaction costs as well. Consequently, there is some risk involved that may be allocated more or less explicitly to participants. These situations involve participants that are - Autonomous. - Heterogeneous. Having different goals, different rationales, different moral standings. - Independent. Act regardless of a shared loyalty, a common authority or previous agreement. - Not-benevolent. One cannot assume they will be moved by the common good or any altruistic aim or consideration. These participants are probably self-motivated, egoist and may even be willing to injure other participants if doing so yields any benefits to themselves. - Not-reliable. Likewise, they may act as if they are able and capable, but even unknowingly, they may fail to act in any expected way out of their own will. - Liable. Although the characteristics above may seem overwhelmingly pessimistic, one should realize that participants ought to be liable for the damage they inflict to others.