Categorizing transaction costs outcomes under uncertainty: a blockchain perspective for government organizations

Abstract

Purpose In response, the purpose of this paper is to provide theoretical frameworks about the organizational uncertainty behind what and when to adopt blockchain technology and their implications on transaction costs. The immature nature and the absence of standards in blockchain technology lead to uncertainty in government organizations concerning the adoption (“what to adopt”) and the identification of the right time (“when to start”). Design/methodology/approach Using transaction cost theory and path dependency theory, this paper proposes two frameworks: to assess transaction cost risks and opportunities costs; and to depict four different types of transaction costs outcomes regarding blockchain adoption. Findings This paper identifies various theoretical concepts that influence blockchain adoption and combine the two critical constructs of “bounded rationality” and the “lock-in effect” to categorize the multiple transaction costs outcomes for blockchain adoption. Research limitations/implications Although existing research in blockchain highlights mainly the potential benefits of blockchain applications, only a little attention has been given to frameworks that categorize potential transaction costs outcomes under uncertainty, in particular from organizational theorists. Originality/value Both frameworks advance the understanding of the decision-making behind blockchain adoption and synthesize the current literature to offer conceptual clarity regarding the varied implications and outcomes linked to the uncertainty regarding transactions costs stemming from blockchain technology.