Sales mode selection and blockchain technology adoption decisions in a platform supply chain

Abstract

In recent years, some large-scale e-commerce platforms have established blockchain systems (BSs) to improve consumer product quality trust degrees (QTDs). However, whether the BSs work eventually depends on the upstream manufacturer strategic decision on whether to join the BSs to provide product quality information authentication. The impacts of the platform sales mode selection between the agency and the reselling modes on the manufacturer blockchain technology (BT) adoption decision are examined, and the equilibrium strategy combinations between the platform sales mode selection and the manufacturer BT adoption decisions are obtained. Furthermore, the impacts of the platform and the manufacturer strategic decisions on the product quality decision are analyzed. The results show that the manufacturer may have more incentive to join the BS under the agency mode than under the reselling mode. In addition, the manufacturer should set a higher product quality level under the agency mode than under the reselling mode, after joining the BS only if the unit BT adoption cost is low. Finally, the QTD, the quality improvement cost and the unit BT adoption cost determine the equilibrium strategy combinations. The double marginalization effect in the channel and the platform channel power advantage are used to explain the above findings. Several extensions are provided to verify the robustness of the results and to broaden the applicability of the model and method.