Platform-leading blockchain adoption for traceability under upstream competition

Customers are facing quality uncertainty when purchasing though ecommerce platforms, which may hinder their purchase intention. The platform can use the traceability of blockchain technology to alleviate consumers’ doubts. We construct a game theoretical model to investigate the issue of platform-leading blockchain adoption in a supply chain where heterogenous suppliers sell products through the platform. There are different selling modes depending on whether the platform cooperates with suppliers as a marketplace (agency contract) or a reseller (reselling contract) or both (hybrid contracts). We find that blockchain would be adopted to improve the efficiency of the supply chain when suppliers have enough capabilities to provide high-quality product regardless of selling modes. Furthermore, the platform’s leadership in adopting blockchain benefits the entire supply chain. It stimulates the platform to provide subsidies for the capable suppliers to solve the incentive mismatch between suppliers and himself. We also make the comparison of blockchain adoption in different selling modes. In particular, we find that the platform is most likely to adopt blockchain when the supplier with higher quality management capability uses the agency contract and another supplier uses the reselling contract. If the suppliers use the same contract, the supply chain usually accepts a higher cost under the pure agency contract, however, it may not be true when the commission rate is very low and the upstream competition is relatively fierce.