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

Purpose – 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”). 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.
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 fourdifferent 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.