Paper: arXiv 2208.07533

Authors: Zhanyi Jiao, Steven Kou, Yang Liu, Ruodu Wang

Abstract

Anonymized risk sharing requires no information about agents’ preferences, identities, private operations, or realized losses. It is especially relevant in the digital economy, with applications such as P2P health-care insurance, revenue sharing for digital music and videos, and blockchain mining pools. Although there is an extensive literature on axiomatic approaches in decision theory, there is, so far, no axiomatic theory of risk sharing. We develop such a theory in the context of anonymized risk sharing. Equilibrium and various notions of optimality are discussed. Applications to the digital economy are presented.

Complexity vs Empirical Score

  • Math Complexity: 8.5/10
  • Empirical Rigor: 2.0/10
  • Quadrant: Lab Rats — theoretically deep, empirically untested

Why this score: This paper presents a highly novel axiomatic theory for anonymized risk sharing, demonstrating significant mathematical depth in its derivations and proofs. However, it is primarily theoretical, lacking empirical validation or backtesting, which limits its immediate practical rigor. The clarity is good for a theoretical paper, and the methodology is well-defined for replication of the theoretical results.

Research Flowchart

  flowchart TD
    A[Research Goal: Develop Axiomatic Theory for Anonymized Risk Sharing] --> B{Key Methodology: Axiomatic Approach & Equilibrium Analysis};
    B --> C[Inputs: No Agent Preference, Identity, Private Ops, or Realized Loss Info];
    C --> D{Computational Process: Define & Analyze Equilibrium, Optimality Notions};
    D --> E[Key Findings/Outcomes: Axiomatic Theory of Anonymized Risk Sharing Developed];
    E --> F[Applications: P2P Healthcare, Digital Revenue Sharing, Blockchain Mining Pools];