Michael Sockin
Associate Professor of Finance, The University of Texas at Austin
Talk title
A Theory of Speculation in Digital Assets
Abstract
We model a digital platform where users learn about the quality of its services over time by using its native tokens. The key friction is users can buy tokens for services or trade them primarily for speculation. In the presence of strong network effects, this tension can lead to situations where no user adopts the platform’s services because the benefit of adoption is lower than that from speculation. Our model can be applied to any digital asset that derives value from network effects and suggests high token inflation and incentive schemes favoring service usage may be integral to sustaining participation.
Bio
Michael Sockin is an associate professor of finance in the McCombs School of Business at The University of Texas at Austin. He teaches graduate and undergraduate courses in asset pricing theory and investment management.
Sockin’s research focuses on the intersections among finance, macroeconomics, and public finance, with an emphasis on the real effects of financial market frictions. His work has been published in The Journal of Finance, The Review of Economic Studies, The Review of Financial Studies, and the Journal of Financial Economics.
Sockin also holds a patent with four other people for ultrafast GE/SI resonator-based modulators for optimal data communications in silicon photonics.
He graduated summa cum laude from Columbia University with a B.S. in mechanical engineering and a B.A. in economics-mathematics. Sockin earned an M.A. and Ph.D. in economics from Princeton University.