Decentralisation Conscious Players And System Reliability

TL;DR

This paper develops a game-theoretic model to analyze how decentralisation conscious players influence the reliability and stability of decentralised systems, highlighting their potential to maintain decentralisation despite practical constraints.

Contribution

It introduces a novel normalised total effort model incorporating decentralisation conscious players and derives Nash equilibria, revealing their impact on system decentralisation and stability.

Findings

Decentralisation conscious players can sustain decentralisation in equilibrium.

Equilibrium contributions depend on players' adjustment speeds.

Supporting high-contribution equilibria may not always increase decentralisation.

Abstract

We propose a game-theoretic model of the reliability of decentralised systems based on Varian's model of system reliability, to which we add a new normalised total effort case that models \textit{decentralisation conscious players} who prioritise decentralisation. We derive the Nash equilibria in the normalised total effort game. In these equilibria, either one or two values are played by players that do not free ride. The speed at which players can adjust their contributions can determine how an equilibrium is reached and equilibrium values. The behaviour of decentralisation conscious players is robust to deviations by other players. Our results highlight the role that decentralisation conscious players can play in maintaining decentralisation. They also highlight, however, that by supporting an equilibrium that requires an important contribution they cannot be expected to increase decentralisation as contributing the equilibrium value may still imply a loss for many players. We also discuss practical constraints on decentralisation in the context of our model.