Decency or devilment: the impact of blockchain technology on product line design

Abstract

ABSTRACT Blockchain is a secure database shared across a network of all participants, characterised by immutability, openness, transparency, and traceability. Therefore, blockchain technology is widely used in supply chain management, which can increase consumers' understanding of product information when goods arrive at the consumer end and increase the risk of consumer privacy information leakage. Considering a supply chain system that consists of a manufacturer and a platform, this paper studies the strategic interactions between the platform's adoption of blockchain technology and the manufacturer's product line design based on blockchain's positive and negative impacts on consumers. We examine the driving factors of the platform's use of blockchain technology, which are related to the effect of information transparency and privacy concerns caused by blockchain and the marginal production cost coefficient. In particular, a higher marginal production cost coefficient could make the platform more likely to use blockchain technology. We also find that the practice of blockchain technology may incentivize a manufacturer to extend its product line.