Smart contracts functionality analysis and game-theoretic modeling

Abstract

Lifecycle contracts (LCC) are a significant organizational innovation in the area of interaction between the state customer and contractors from the business sector of the economy. This method of contractual arrangement provides an effective and mutually beneficial public-private partnership when implementing infrastructural projects and programs in knowledge-based industries. According to LCC, the contractor company ensures not only the building an industrial site of public importance, but also carries out service functions at its operation stage. However, the existing LCC-technologies have sufficiently high transaction costs and do not ensure the integration of information when switching from production to the operational stage. The objective of this article is to study the prospects of the smart-contract implementation for improving the processes when an industrial facility moves through the life cycle stages. The paper proposes a non- cooperative game-theoretical model for verification of the effectiveness of using a smart-contract for service under the LCC with insurance deposits. The result of the study has shown that the implementation of the smart contracts on stages of work with the contractors increases income and reduces risks, as well as increase the transparency of the processes for both the enterprise itself and the third-party suppliers.