How does blockchain-enabled information sharing influence supplier encroachment mode selection under asymmetric quality preference information?

The development of e-commerce is transforming supplier encroachment from a traditional integrated mode to a decentralized mode, in which independent e-commerce divisions manage online operations. However, how suppliers should choose their encroachment mode when retailers hold private information about consumer quality preference remains underexplored, especially in the presence of blockchain-enabled information sharing. Inspired by this gap, we investigate whether and how a supplier should encroach under information asymmetry and how blockchain-enabled information sharing influences encroachment mode selection. This study develops game-theoretic models consisting of a supplier who may establish an e-commerce division and a retailer with private information. Our findings first show that integrated encroachment can alleviate double marginalization by lowering wholesale and retail prices, whereas decentralized encroachment mitigates channel competition by restricting direct sales. Second, the supplier favors decentralized encroachment when direct selling costs are low, whereas integrated or no encroachment becomes more attractive as these costs increase. Moreover, blockchain-enabled information sharing can weaken the supplier’s reliance on integrated encroachment, shifting preferences toward decentralized or no encroachment. Finally, when direct selling costs are moderately low or very high, the retailer prefers not to share information. To test the robustness of our results, we conduct several extension analyses and confirm that the main findings remain valid. Our research provides valuable guidance for selecting appropriate encroachment modes and information-sharing strategies in supply chains. Specifically, suppliers should choose among no, integrated, or decentralized encroachment based on direct selling costs and information-sharing conditions, while retailers should strategically decide whether to share information by considering direct selling costs, sharing costs, and anticipated supplier encroachment.