Price signal or blockchain technology? Quality information disclosure in dual-channel supply chains

Qian Zhang, Yongjian Li, Pengwen Hou and Jun Wang

European Journal of Operational Research, 2024, vol. 316, issue 1, 126-137

Abstract: Quality information asymmetry regardless of online or offline channels have damaged the profits of high-quality manufacturers. Price signal and blockchain technology (BCT) are two strategies to eliminate this asymmetry, with BCT potentially incurring higher costs but also boosting demand potential. Therefore, in a dual-channel supply chain consisting of a manufacturer with private quality information and a retailer, we use a game-theoretic model to investigate which information strategy should be adopted by the high-quality manufacturer. Main results unveil a counterintuitive finding: the high-quality manufacturer may not reap greater benefits from BCT despite its ability to simultaneously boost prices and demands in both channels; conversely, the retailer can still derive benefits from BCT even if it fails to augment the expected demand in the retail channel. We attribute this phenomenon to two key effects of BCT: the information effect and the basic demand expansion effect. Additionally, we highlight the pivotal impact of channel market share on the value of these two strategies, as it not only affects the efficiency of information transmission through the price signal strategy but also the distinct demand enhancement that BCT offers to both channels. Specifically, for the products with a lower production cost difference and a higher market share in the retail channel, our research demonstrates that BCT has the potential to benefit the entire supply chain. This paper provides practical guidance for the strategic implementation of BCT in dual channels.

Keywords: Supply chain management; Information asymmetry; Signaling game; Blockchain (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:316:y:2024:i:1:p:126-137

DOI: 10.1016/j.ejor.2024.01.019

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