Do Smart Contracts Incur Higher Transaction Costs than Traditional Contracts?

A smart contract is an agreement enforced by blockchain technology. It supposedly allows the parties involved to conduct transactions more efficiently than a traditional contract, which is based on legal (costly) enforcement. This chapter challenges this claim. Given the need for an efficiency-enhancing adaptation of institutional arrangements – a chief problem of Oliver Williamson’s transaction cost economics – smart contracts may incur higher transaction costs than traditional contracts