Supply chain structure and blockchain deployment strategies in competing supply chains

Blockchain technology has emerged as a transformative tool to enhance supply chain traceability, a critical concern in today’s business environment. This study develops game-theoretic models to analyze the interplay between supply chain structure and blockchain deployment strategies in competing supply chains. Our results show that vertical integration generally benefits a decentralized supply chain but can harm the competitor under most blockchain deployment strategies. In particular, when both competing supply chains deploy blockchain, they tend to adopt vertical integration. However, when only one decentralized chain deploys blockchain, its adoption of vertical integration may reduce profits for itself and its competitor, highlighting the strategic complexity of partial adoption. We further identify the equilibrium blockchain deployment strategies under different supply chain structures and demonstrate that these strategies depend on customer privacy concerns. We also show that both supply chains adopt vertical integration and blockchain when privacy concerns are low. However, they adopt vertical integration without blockchain when privacy concerns are high. Under moderate privacy concerns, blockchain adoption depends on the level of integration, with higher integration promoting its deployment. Finally, we find that vertical integration improves social welfare more effectively when both chains deploy blockchain. It also has a positive effect when only a single centralized chain deploys blockchain and privacy concerns are low. Overall, our findings provide valuable managerial insights for decision-makers when considering blockchain adoption in competitive settings, highlighting the critical role of supply chain structure and consumer privacy concerns.