Two well-known experts in the field of economics have been recruited by the Prysm Group to be members of its senior advisory board. Prysm, a blockchain economics and governance firm, has announced that Nobel Prize winner Oliver Hart and Preston McAfee, formerly the chief economist for Microsoft, have both agreed to assist Prysm, which provides “counsel in the complex economic fields of contract theory, market design, game theory and social choice.”
McAfee, who is also a former economist for Google, indicated that he’s extremely enthusiastic about the endeavor and said that “blockchain enables a variety of new business models by permitting decentralization and publication of digital records.” He added, “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.”
McAfee left Microsoft last February. He has published more than a hundred articles, most of which focused on industrial organization and microeconomics. In 2014, he won the Golden Goose Award, an award given to scientists whose research leads to innovations or inventions that have a significant impact on society or humanity.
Hart agrees with McAfee and says that, in order to design systems to reach their goals, it is important that the founders of blockchain startups develop an understanding of the potential difficulties that may arise from developing code that is designed to displace traditional power structures and institutions.
The Nobel Prize laureate also said that he is fascinated with how blockchain technology could be used by developers to “design better incentives and contracts,” adding, “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.”
As a result of work done on contract theory, Hart, and his associate, Finnish economist Bengt Holmström, were both awarded the Nobel Prize in Economic Sciences in 2016. Hart sees a lot of similarities between his past work and the Prysm endeavor, and feels that there are a significant number of identical characteristics between the two. This has given him renewed energy to dive into the project and help the economy of blockchains develop as successfully as the blockchains themselves are developing.
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