Should a manufacturer adopt blockchain when its competitor discloses blockchain-enabled product quality information?
Xiaoping Xu, Jiahao Chen, Shuai Liu, Yugang Yu, T.C.E. Cheng
Abstract
We consider a supply chain comprised of two competing manufacturers, where one is a blockchain-enabled disclosed quality information manufacturer (BP manufacturer), and the other is a manufacturer without blockchain support (OP manufacturer). The duopoly game, OP manufacturer-led Stackelberg game, and BP manufacturer-led Stackelberg game are considered. In addition, we also consider two types of consumers, namely expert consumers who exactly know blockchain and rookie consumers who have a limited knowledge of blockchain. The results demonstrate that (a) the BP manufacturer should serve both expert and rookie consumers if the percentage of expert consumers is sufficiently low; (b) the optimal blockchain-enabled disclosed quality information level increases with the blockchain ability and percentage of expert consumers; (c) blockchain adoption leads to higher profits for the OP manufacturer when the blockchain ability is high and this finding is robust under various power structures; and (d) the BP (OP) manufacturer-led Stackelberg game benefits the OP (BP) manufacturer best, and as the BP manufacturer’s decision-making grows, she needs to use blockchain to provide more detailed product quality information. Extending our work to several scenarios, we find that some of the results are robust while the others change.