The Impact of Web3 on Platform Economy: A Transaction Cost Economics Perspective

This thesis dives into how Web3 can create efficiencies compared to the Web2 model, all through the lens of Transaction Cost Economics (TCE) in the digital economy. Rather than just sticking to the traditional TCE framework, it expands on it to address the new complexities that come with decentralized systems. It takes into account factors like implementation and training costs, the hurdles of distributed governance, the necessity for secure code and infrastructure, as well as issues related to scalability and usability, not to mention the long-term resilience of protocols. To bring these ideas to life, the study conducts a comparative analysis between a Web2 benchmark solution (Oracle SCM) and a Web3 alternative (VeChain). The findings indicate that Web3 could potentially lower ex post costs associated with monitoring and enforcement, largely due to automation, transparent shared ledgers, and the ability to embed contractual rules into smart contracts. However, the analysis also points out that Web3 might raise adaptation costs and introduce new challenges related to governance, security management, and user experience. In this context, achieving net efficiency isn’t a given; it hinges on factors like the number and diversity of participants, the significance of end-to-end auditability, the level of institutional stability, the organizational maturity of those adopting the technology, and the presence of interoperability standards that help minimize fragmentation. Ultimately, the main contribution of this thesis is the introduction of an extended TCE–Web3 framework. This framework not only revisits transaction cost theory for the decentralized economy but also serves as a practical tool for assessing technological make-or-buy decisions and crafting hybrid business models. In doing so, it provides valuable insights for both academics looking to refine economic theory and practitioners making strategic decisions in an increasingly digital and decentralized business environment.