 Thank you very much. Thank you for the opportunity to present this this paper. This is a great audience to get to get comments and discussion. And I'm really excited about it. This is a joint project with Yanis Bakos also at NYU. And, you know, for a while now Yanis and I have been investigating blockchain and blockchain related technologies. One of those technologies is smart contracts. And like with any blockchain technologies, we have heard a lot about how smart contracts are going to make the business landscape more decentralized and democratic and it's going to free us from the nomination of a large, large players. The smart contracts are themselves. I'm not going for this audience here. I'm not going to go into a lot of explanation of smart contracts just just a little bit. But let me point out that smart contracts themselves go back to the 1996 paper by Nick Szabo, where he describes the now iconic example of Carly's. And in that example, if a payment on a car is missed, the smart contract will automatically lock the car and return the control rights to the to the bank. After 2014, Ethereum made smart contracts much more popular and smart contracts entered mainstream discourse. And since that, it has been said and expected that smart contracts will make contracting complete. They will allow us to get rid of courts they will allow us to get rid of escrow holders and other trusted enforcers. And with that they will enable for complete decentralization so there were a lot of those there are those those are enabled by smart contracts and I'm not talking about the failed. In our case, but there are many other dollars. And in the result, that should allow for democratization of of the business landscape of industries that should allow us to have small entrance coming and competing and on the level field with with large large players. So those are big promises. What we set out to do is to build a model to figure out whether smart contracts really can deliver on those promises. And if so, what are the economic forces that are allow us that would allow them to do that. So to start with just to to ground them the terms smart contract is basically a computer program. And as a specific computer program that automatically executes an agreement between the parties upon a certain trigger. So, to be fully clear, smart contracts does not need multiple parties you can have a smart contract with yourself on a terium, but the ones that we think are going to be interesting are the ones that involve multiple parties. So, the key characteristic of a smart contract, the one that is going to bring the most benefit is that because of the automated execution does not allow on does not allow reneging on the on the terms of of the agreement. The key limitation is that the trigger and the agreement mass allow for allow for digital input and digital execution. And this is a limitation because not every agreement allows allows for such level of digital codifiability. And that means that such agreement is does not lent itself to smart contracting so not everything can be smart contracted out. The digital inputs that are necessary for smart contracts very often come from new connected sensors. So sometimes we already have the digital input that we need, but very often we were talking about smart contracts. We mean that we are going to also set out new sensors the sensors are connected in order to directly provide input to that to the smart contract. And this such connected sensors are now also known as Internet of Things. And because of that, because of this connection between the dependency between the smart contracts and and the sensors, the benefits of smart contracts are often confused with those of digital sensors. And this in fact goes back even to the new examples are Carly's example, because in that example the main benefit comes from the mechanism that allows the car to be locked remotely. And this benefit is ascribed to the smart contract. But the two technologies can be implemented separately can have sensors without smart contracts and we have, we have, we can have smart contracts with the existing digital inputs without without adding new technology. So we built a simple model in order to carefully separate the effect of the smart contract and sensors on the contracting situation. And what we find is that sensors expand the state space over which the parties can contract the smart contracts restrict the strategy space, and because of that they're going to have a different effect on the efficiency of the contract. So let me describe the very simple model example that we are we are working with, and it is motivated by the fact that a lot of smart contracts nowadays are actually implemented in shipping industries. So we have a fruit company and a transportation company FNT and fruit company contracts with the transportation company for shipping off perishable good fruit at the price of P. The shipment may be of high quality or low quality. If the shipping is of high quality which means that fruit is properly refrigerated. F obtains high value is the fruit is tasty and last longer and tea in course higher cost because refrigeration is costly. If the shipment is low quality fruit was not refrigerated the fruit company obtains low quality because the fruit is going to rot in quickly on the shelf and transportation company bears only lower cost. We are going to assume that shipment even of low quality is more of socially beneficial. And it would be even better to have high quality shipment even though it is of high cost. And if the fruit is not shipped at all both parties obtain zero. After the delivery the fruit company should pay to the transportation company. But if it doesn't transportation company can take a fruit company to court to expand the payment. If the dispute is brought to court, then both parties are going to bear some non reimbursable cost of legal action that could be effort and stress and and some other some other aspect that cannot be reimbursed in a way. And in the simple model we are assuming that the courts always fair and they are able to enforce the performance of the contracts in full that the model lends itself easily to relaxing this assumption to some extent and even actually do comparative statics on the furnace of course. So, in in this setup, we, what is crucial is on the upon delivery, when the fruit is delivered, the refrigeration is not observable. So, we cannot see at the moment or verifiable in court so the fruit can fruit company cannot see whether the fruit was refrigerated. Yes, they are going to get higher or lower value out of it later down the road but not at the moment of the delivery and payment. The fact of delivery and the payment itself is both observable and verifiable. So, so that that that can be easily contracted up. So that is the extended former presentation of this game where the transportation company can provide local to delivery high quality deliver no delivery at all. The fruit company pays or does not pay and then it doesn't pay the transportation company takes legal action or not. So, as very easily seen it in such a case in this environment that the trading is never efficient in equilibrium. First of all, if the cost of legal action is too high is high. Then the transportation company will not find it worthwhile to take the fruit company to court if the payment is not made knowing that the fruit company is not going to pay knowing that the transportation company is not going to deliver at all. There is no trading and zero social welfare, but even for low value of legal action, even if the threat of going to court is a credible threat. Then we are only going to get low quality delivery in this equilibrium because the contract cannot be specified for the for different quality of delivery. Okay, so markets current situation have a way to deal with that we are we have we can have relational contracts we can have reputation we can have our long term relationships. But in all those all those cases, the, the mechanism that are defending us against this, this failure are our favoring large companies, and they require trust. So the premise of smart contracts is that maybe with smart contracts we can have a relationship that that's not required trust, and will allow small companies to come enter the market and and play the level playing field with the large incumbents. So that should work out even in the one period game. So, we see that smart contracts can help a little bit, but we're going to qualify that. So, because the fruit delivery and the payment are verifiable we can assume that they're digitally, they're digitally codifiable we can have a smart contract that is going to make an automatic payment upon the delivery. Instead, it restricts the strategy space off of F because now F no longer has a choice between pay and not pay. That is going to improve the contracting situation because now even for high cost of legal action, the transportation company will deliver the food because we'll know that it will get paid. The smart contract is going to make contracting possible where it was not possible before, but it does not increase the efficiency of the trade because the only quality of the delivery that is going to happen is low quality. So, we can think and look into the effect of sensors. So, if the sensors are put into place and just sensors without smart contract, the sensors that would, for example, in the container of the of the shipment that would allow to distinguish between the non refrigerated shipment upon delivery sensors are provide the provide the variable on which the contract can be can be specified and also it would be an evidence verifiable in court. That, by naturally is going to allow us to to to distinguish between states and is going to allow for efficient high quality delivery when delivery happens. At the same time, however, if the cost of going to court is high. The same dynamics applies transportation company is not going to find it worthwhile to go to to to go to court and take legal action that knowing that after the company is not going to pay knowing that transportation company is not going to deliver. So, smart contracts are going to help in some situations and sensors are going to help distinguish between the states, but for those high high cost of transaction, the, the only way to get the efficient trade is to have both smart contracts and and sensors. So, so when we have both technologies together contracting in equilibrium is fully efficient. So, as our clear synergies but as we can see also the synergies may depend on the parameters. Now smart contracts and sensors have different effects differently the interactions sensors increase the state space over which the parties can contract and smart contracts reduce the strategy space. So, in effect, smart contracts can make contracting possible when it was not, but in themselves they are not improving efficiency, whereas sensors can increase efficiency when contracting already occurs. And those benefits will have different value depending on the parameters. If we also take into account that both of those technologies can be implemented together and they will have different costs of being implemented. We can ask, when is it optimal to implement one technology or the other technology or when do we need to implement both of them together. What we find is that sometimes when we implement one of the technology adding the other technology brings no benefit. And if we and in other times for the parameters, implementing only one technology brings absolutely no benefit it only makes it worthwhile if we can efficiently if we can, if we can afford to to implement both technologies together. So, if the cost of legal action is really low, then there is no argument and no, no benefit from, from implementing smart contracts, even when smart contracts are really cheap to implement. And there may be some regions where it is optimal to implement sensors. When we have inter, when we have intermediate value of legal action, we can see that the smart contracts may be worthwhile to implement. The area where it's worthwhile to implement smart contracts is increasing, but it is never good to implement never beneficial to implement both of them together. So in some regions when one of them can do the job, I think the other one is not going to improve. Whereas if this cost of legal action is really high, then it may be worthwhile to implement smart smart contracts. It may be worthwhile to implement sensors only when it is also worthwhile to implement smart contracts, sensors by themselves are not going to help help at all. And in fact, in some in this region implementing smart contracts at all alone is also not not good. So this, depending on the parameters, it tells us for which industries, which technologies may be optimal to be, to be implemented and in which industries they, each of the technologies or both of them together can, can effectively change the relationships between the, in the market. Now, another thing is that even though implementing a technology may be socially optimal, the individual incentives to adoption may differ. So what we find we find that if we look at the individual incentives under some parameters we get over provision of technology, and sometimes we get under provision of technology. So, for example, as we said earlier for really low costs of legal action, it is not socially optimal to implement smart contracts because they provide no benefit and they are costly to implement. And yet if the transportation company has lower gaining power, then the fruit company has incentive to impose this technology, even though it lowers social welfare because it allows a fruit company to capture more surplus from T. And the transportation company if it has lower gaining power it may also be worse off with sensors, because of with or without smart contracts, even though social surplus increases and this is also because a fruit company can extract more surplus with sensors. And this may give incentives to sabotage sensors if they are imposed. So let me finish here and rub it up. What we show is that carefully separating the effects of smart contracts and sensors on contracting situation. It shows that sensors increase the strategy space over which we can contract smart contracts reduce reduce the strategy space. And it has different effects on the different effects on the efficiency of contracting. We find conditions under which it is optimal to implement one of the technologies on where there are synergies to implement both or it doesn't make sense to implement only one. And we also look at the incentives to adopt that may be conflicting with the social optimal. And thank you very much and I'm looking for the Q&A.