Can price still be an honest signal of products’ quality? – A perspective of blockchain adoption

Abstract

High quality and good price is crucial for achieving high-quality development in the agricultural products supply chain. However, false information disclosure is a common occurrence in marketing, leading to the failure of price signals. The vision of blockchain technology elicits an opportunity for the authentic disclosure of quality information. This paper targets the relationship between on-chain information quality and price signals in the context of blockchain. Meanwhile, we explore and assess the best timing of blockchain adoption under different information disclosure strategies. The study found that: (1) There are differences between the agricultural supermarket’s blockchain adoption strategies and farmers’ quality information disclosure strategies. (2) Without blockchain technology, authentically disclosing quality information through price signals is always the optimal quality disclosure strategy for farmers. (3) The agricultural supermarket will only consider using blockchain technology if the traceability value is high-gain. Specifically, when the planting cost is low, the agricultural supermarket will be more inclined to embrace blockchain. Simultaneously, it is possible that high-quality farmers may suffer a loss in profit. As the number of information-sensitive consumers increases, the performance of the agricultural products supply chain can eventually achieve Pareto optimality. The conclusions of this paper can provide references for the rational use of blockchain technology and information disclosure strategy in the supply chain.