# Using cryptography to solve economic problems

Go backCryptoeconomics usually refers to the study of participants in decentralized P2P networks. In the current article, I'm going to investigate how cryptography can be used in more traditional economics settings. The goal is to inspire myself or others with potentially interesting and yet unexplored areas of work. An important point to take into consideration is whether any of these theoretical models have actually found any use in the real world.

## Existing cryptographic economics research

### Cryptography in game theory

In Game Theory, a set of **Players** use information about **choices** and **pay-off's** in order to make decisions. However, in the real world, pay-off's of ourselves and others are often unknown. Various studies have theorized that proofs may be given about pay-off's, without the receiver having to know the specific pay-off's. Some valuable papers / materials:

- A Cryptographic Solution to a Game Theoretic Problem
- Games with zero-knowledge signalling
- Cryptography and Game Theory

### Cryptography in voting schemes

Cryptography has been used extensively in Voting schemes. I'll mention one usage of cryptography which may be of interest:

### Cryptography in auctions

Cryptography has been used extensively in auctions. An auction is a market mechanisms in which a price is rapidly established. Compare that to markets which reach an equilibrium price level through slow trial and error.

- Publicly Verifiable Sealed-Bid Auctions with a Trustless Auctioneer
- Zero Knowledge Proofs Applied to Auctions
- Implementing a Secure Verifiable Auction
- A protocol for verification of an auction without revealing bid values

## Next steps

I see a few possible ways in which the state of the art can be improved, in three levels of abstraction:

- Firstly, by developing new cryptographic or game-theoretic primitives and models, an improved theoretical understanding of society can be created.
- Secondly, existing theoretical models can be simulated in order to evaluate their usefulness. Various game theoretic and cryptographic libraries already exist (e.g. Axelrod), all that remains is the arduous task of trying to understand how to couple them together.
- Thirdly, models can be applied in practice. The goal of course being to find a more epic use for a model than the Cuban Missile Crisis.