Smart contracts: how smart are they?

An unanswered question in the literature is whether smart contracts really can make contracts more complete. The aim of this paper is to show whether smart contracts can change contracting and add surplus, specifically in the field of moral hazard, hold-up and contracts with contingent control. Smart contracts are digital, tamper-proof and self-enforcing contracts running on the blockchain technology. Smart contracts can save on writing, enforcement and renegotiation costs, and hence they make contracts more complete. However, it seems that they can do nothing to unforeseen contingencies. Thus, smart contracts make many contracts more complete, but not necessarily all contracts.