This paper introduces concave pro-rata games, where players share payouts from a pooled asset based on their contributions, shedding light on decentralized exchange dynamics.
The game exhibits a unique symmetric pure equilibrium, indicating stable strategies in this environment, while revealing a price of anarchy that's proportional to the number of players.
Numerical analyses show that players tend to converge quickly to equilibrium in iterated play, implying that repeated interactions may stabilize outcomes and enhance efficiency.
The research addresses the economic ramifications of batch processing in blockchain transactions, highlighting miner extractable value and the challenges posed by transaction ordering.
#concave-pro-rata-games #decentralized-exchanges #blockchains #equilibrium-analysis #miner-extractable-value
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