The impact of blockchain technology on competing suppliers on an E-commerce platform

Abstract

We develop a game-theoretic model to explore the impact of blockchain adoption on various players within a platform supply chain, as well as its interaction with selling contract strategies. In our model, the high-class supplier determines the blockchain adoption strategy, and the low-class supplier selects the selling contract. Our analysis shows that the low-class supplier benefits from the high-class supplier’s adoption of blockchain, resulting in higher prices for both products. In the sequential equilibrium, the high-class supplier's blockchain adoption decision is driven by operational costs, whereas the low-class supplier's choice of selling contract depends on its product quality. Additionally, we extend the model to analyze scenarios where the high-class supplier operates through a reselling channel and investigate the impact of endogenous quality decisions.