Unformatted text preview: If the check does not clear within the specified time period, Alice shows proof of this to the lawyer and the lawyer returns the title to Alice. In this protocol, Alice trusts the lawyer not to give Bob the title unless the check has cleared, and to give it back to her if the check does not clear. Bob trusts the lawyer to hold the title until the check clears, and to give it to him once it does. The lawyer doesn’t care if the check clears. He will do his part of the protocol in either case, because he will be paid in either case. In the example, the lawyer is playing the part of an escrow agent. Lawyers also act as arbitrators for wills and sometimes for contract negotiations. The various stock exchanges act as arbitrators between buyers and sellers. Bankers also arbitrate protocols. Bob can use a certified check to buy a car from Alice: (1) Bob writes a check and gives it to the bank. (2) After putting enough of Bob’s money on hold to cover the check, the bank certifies the check and gives it back to Bob. (3) Alice gives the title to Bob and Bob gives the certified check to Alice. (4) Alice deposits the check. This protocol works because Alice trusts the banker’s certification. Alice trusts the bank to hold Bob’s money for her, and not to use it to finance shaky real estate operations in mosquito-infested countries. A notary public is another arbitrator. When Bob receives a notarized document from Alice, he is convinced that Alice signed the document voluntarily and with her own hand. The notary can, if necessary, stand up in court and attest to that fact. The concept of an arbitrator is as old as society. There have always been people—rulers, priests, and so on—who have the authority to act fairly. Arbitrators have a certain social role and position in our society; betraying the public trust would jeopardize that. Lawyers who play games with escrow accounts face almost-certain disbarment, for example. This picture of trust doesn’t always exist in the real world, but it’s t...
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This note was uploaded on 10/18/2010 for the course MATH CS 301 taught by Professor Aliulger during the Fall '10 term at Koç University.
- Fall '10