Blockchain adoption and contract coordination of poverty alleviation supply chain considering altruistic preference

Abstract

This study discusses blockchain adoption strategy and coordination of a poverty alleviation supply chain (PASC) consisting of one retailer with altruistic preference and one farmer cooperative. Four decentralized models are considered, including scenario AN (with altruistic preference and without blockchain), scenario AB (with altruistic preference and with blockchain), scenario DN (without altruistic preference and without blockchain), and scenario DB (without altruistic preference and with blockchain). We solve the game models in these four scenarios based on backward induction and obtain the optimal solutions. Additionally, two centralized models, namely scenario CN (without blockchain) and scenario CB (with blockchain), are used as benchmarks for coordinating the PASC. Through comparative analysis, we find that (1) the retailer does not necessarily benefit from blockchain adoption. The retailer has an incentive to adopt blockchain when the fixed and unit operating costs of blockchain adoption are low. Interestingly, even when the unit operating cost of blockchain adoption is high, the retailer can still increase its profits by adopting blockchain when consumers’ acceptance level of agricultural products is low. (2) Under certain conditions, blockchain adoption can lead to a win–win situation for the retailer and the farmer cooperative. (3) The retailer’s altruistic preference increases the profits of the farmer cooperative and the PASC, but at the cost of reducing its own profits. (4) The two proposed contracts, the altruistic preference joint two-part tariff contract and the altruistic preference joint profit-sharing contract, can effectively coordinate the PASC. (5) Three extensions illustrate that the findings regarding the retailer’s blockchain adoption strategy remain robust under strict conditions.