Selling mode choice and blockchain adoption in an e-commerce platform with information disclosure

Abstract

Many e-commerce platforms, such as Amazon and JD.com, consider product information disclosure as a crucial retail strategy. However, due to potential consumer distrust in the disclosed information, these platforms may employ blockchain technology to validate the information and alleviate consumers’ doubts. This study presents a game-theoretical model to investigate the interaction among the manufacturer’s choice of selling mode, the platform’s decision regarding blockchain adoption, and information disclosure strategies in the presence of information asymmetry. Optimal pricing and information disclosure strategies are derived, and the impact of various parameters on the equilibrium results is analyzed. We find that the consumers’ privacy concerns and blockchain implementation costs both have negative effects on the equilibrium retail price, disclosed information amount and profits of the manufacturer and platform. Moreover, we also find that the introduction of blockchain has different effects on a platform’s pricing and information disclosure strategies depending on the market size. In addition, conditions are identified under which the manufacturer selects the optimal selling mode and the platform makes an optimal decision on blockchain adoption. The findings demonstrate that the cost of consumers’ privacy concerns and the commission rate play significant roles in determining the equilibrium selling mode selection and blockchain adoption strategies.