Blockchain Adoption and Organic Subsidy in an Agricultural Supply Chain Considering Market Segmentation

Chunmei Li (), Tianjian Yang and Ying Shi
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Chunmei Li: School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing 100876, China
Tianjian Yang: School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing 100876, China
Ying Shi: China Telecom Corporation Limited Research Institute, Guangzhou 510630, China

Mathematics, 2023, vol. 12, issue 1, 1-20

Abstract: The quality authenticity of organic agricultural products has always been a hot issue for consumers. Blockchain’s advantages in information traceability and preventing data from being tampered with can reduce fake and counterfeit products, increasing the consumers’ trust in the quality of organic agricultural products. Considering market segmentation of consumer types in organic agricultural products (OPs) and conventional agricultural products (CPs), this study builds a game-theoretical model to explore how participants decide between blockchain traceability platforms and organic subsidy strategies. Results show that the producer should introduce the blockchain when the fraction of blockchain technology’s total cost shared by the producer is smaller and the fixed cost of implementing blockchain is higher or when the fraction of blockchain technology’s total cost shared by the producer is higher and the fixed cost of implementing blockchain is lower. The retailer is inclined to an organic subsidy, and the smaller the market proportion of undifferentiated-conscious consumers (UCCs), the more inclined the retailer is to the organic subsidy strategy. In addition, the market share of UCCs positively promotes the sales quantities and supply chain profits of CPs but is not conducive to the sales quantities of OPs.

Keywords: blockchain in supply chain; agricultural supply chain; organic subsidy; consumer type; supply chain management (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
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