Incentive for blockchain technology adoption in an online platform-based co-opetitive supply chain

Abstract

This paper explores the incentive for blockchain technology (BT) adoption in a co-opetitive supply chain with an online platform from the perspectives of consumers’ sensitivities to products’ checking time cost and authenticity. Within this supply chain framework, the manufacturer and reseller are co-opetitive, and both of them sell their products via the same online platform by paying a commission fee. The adoption of BT can reduce consumers’ time cost of checking products and ensure product authenticity. We establish decision models without and with adopting BT and analytically compare the equilibrium outcomes. Results show that the online platform’s incentive to adopt BT hinges on the commission rate, additional production cost, and fixed cost with introducing BT. When both the fixed cost with introducing BT and additional production cost are low, and the commission rate falls in a moderate range, the online platform is willing to introduce BT. The manufacturer participates in blockchain when the competition intensity is high or when the competition intensity, commission rate and additional production cost are all low. Interestingly, adopting BT benefits the reseller with a free-riding behavior only if the additional production cost is low. Based on the basic model, we make some extensions to check the robustness of these results by relaxing our parameter settings and changing the sequence game. We verify that our main derived results remain true in these extensions.