Early Adopter or Follower? The Strategic Equilibrium of Blockchain Technology Adoption Strategy for Competing Agri-Food Supply Chains

Abstract

Despite the touting value of blockchain technology (BT), many agri-food supply chains are still struggling to the adoption of it. In this article, incorporating the benefit and cost associated with BT, we seek to answer whether and under what conditions can two competing agri-food supply chains benefit from the adoption of BT, and how government choose optimal subsidy scheme to promote the adoption of BT. The findings suggest that the Nash equilibrium outcome toward BT adoption strategy will be greatly affected by key parameters, such as competitive intensity, the growth rate of the market size and the investment cost with the adoption of BT, and the planting cost of the agri-food. Specifically, early adopter can always snatch more benefit from the adoption of the BT than the follower, and the gap between them will be increased in the competition intensity. In addition, the decisions selected by agri-food supply chains does not always benefit the consumer surplus and the social welfare, which call for further government subsidy scheme to promote the adoption of BT. The findings provide important implications for both the industrial managers and policy makers on how to benefit from BT in the digital transformation era.