Eliminating information asymmetry in supply chains: Blockchain-driven or not

Blockchain technology is widely adopted to tackle information asymmetry within supply chains. However, a comprehensive assessment of the value of blockchain remains incomplete, particularly in markets where customers’ perceptions of product quality exhibit substantial polarization. This paper models a supply chain comprising a manufacturer and a retailer to analyze the impact of blockchain on information symmetry elimination. We examine two dimensions of blockchain’s role in mitigating information asymmetry within supply chains. We focus on (i) the disparity in quality information between the manufacturer and retailer, and (ii) the discrepancy in quality information between consumers and the product. We find that if both the manufacturer and the retailer raise prices simultaneously due to blockchain adoption, the manufacturer should avoid claiming that the product quality is very high or low. When consumer trust in product quality is moderate and the benefits of blockchain are moderate, the value of blockchain is realized more at the production stage. Conversely, when consumer trust is either very low or very high and the blockchain benefits are substantial, the value of blockchain shifts to the retail stage. These insights offer strategic guidance for retailers and manufacturers in leveraging blockchain for competitive advantage.