Blockchain-enabled digital asset tokenization for crowdsensing in environmental, social, and governance disclosure

Abstract

Mobile crowdsensing has the potential to facilitate Environmental, Social, and Governance (ESG) disclosure in supply chain networks. Traditional crowdsensing involves smartphone users sharing information to fulfill specific tasks while maximizing their rewards. But, implementing crowdsensing for ESG demands (1) cost-sharing to support technology adoption by information providers, (2) tracking the ownership and use of information, and (3) tackling the drawback of monetary incentives. This study investigates a novel digital asset tokenization mechanism for crowdsensing in ESG disclosure. Its blockchain tokens can keep track of each user's identity and consumption behavior to deliver necessary symbolic incentives to the information or digital asset provider. We model the interaction between providers and users as a two-stage Stackelberg game to analyze the participants' usage levels and optimal investment in technology. The incentive mechanism considers various factors such as technology adoption costs, level of cost sharing, and symbolic incentives to reveal their impact on participant benefits. Moreover, we endogenize the cost-sharing to evaluate/study the factors influencing the ideal/optimal cost-sharing level from digital asset consumers. We find that an increase in reputation incentive per token stimulates token consumption, which leads to more significant payoffs for the participants. Conversely, increasing technology adoption costs decreases token consumption, leading to lesser profits for the participants. However, in the case of cost-sharing, there exists a unique level of cost-sharing before (after) which utility of DA consumer increase (decreases), i.e., an incentive mechanism built on endogenous cost-sharing exhibits a competitive advantage over exogenous cost-sharing in terms of the profit it delivers to the DA consumers.