Establishing Cryptocurrency Equilibria Through Game Theory

Authors

Carey Caginalp, Chapman University
Gunduz Caginalp, University of Pittsburgh

Document Type

Article

Publication Date

5-7-2019

Abstract

We utilize optimization methods to determine equilibria of cryptocurrencies. A core group, the wealthy, fears the loss of assets that can be seized by a government. Volatility may be influenced by speculators. The wealthy must divide their assets between the home currency and the cryptocurrency, while the government decides the probability of seizing a fraction the assets of this group. We establish conditions for existence and uniqueness of Nash equilibria. Also examined is the separate timescale problem in which the government policy cannot be reversed, while the wealthy can adjust their allocation in reaction to the government’s designation of probability.

Comments

This article was originally published in AIMS Mathematics, volume 4, issue 3, in 2019. https://doi.org/10.3934/math.2019.3.420

Recommended Citation

Caginalp, C., & Caginalp, G. (2019). Establishing cryptocurrency equilibria through game theory. AIMS Mathematics, 4(3), 420-436. https://doi.org/10.3934/math.2019.3.420

Peer Reviewed

1

Copyright

The authors

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 License.