Blockchain technology for supply chain traceability: A game-theoretic analysis between e-platforms

Abstract

In view of the rapid development and application of blockchain technology, this paper considers a secondary supply chain system consisting of a single upstream supplier and a downstream e-tailer that implements blockchain technology and a traditional e-tailer that does not implement blockchain technology. We establish the demand function of two channels based on consumers’ sensitivity to the blockchain and use the Stackelberg game model to compare and analyse the e-tailers’ profits from the two channels. For the basic properties, interestingly, we find that there exists a critical threshold on the cost sensitivity to effort that helps each e-tailer decide whether to implement effort. If the cost sensitivity to effort is high, the two-sided e-tailers will reduce their effort as much as possible to obtain greater profits. Conversely, if the cost sensitivity to effort is low, they will increase their effort to obtain more benefits. We also discuss the role of blockchain technology in competition between e-tailers and analyse the impact of the product brand effect brought by the traceability characteristic of blockchain on the competition between e-tailers. To check the robustness of the core results and to investigate different forms of supply chain configurations, this paper further develops the analysis of the supplier entering agency agreements with two-sided e-tailers. Under this scenario, the supplier sells their products directly to consumers through two-sided e-platforms and shares revenue with e-tailers as platform agency fees. These core ideas remain valid in the extended model.