The Incentive Study in the Blockchain Era: A Two-Period Strategic Inventory Game

Jianheng Zhou () and Qingying Li
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Jianheng Zhou: Glorious Sun School of Business and Management, Donghua University, Shanghai, P. R. China
Qingying Li: Glorious Sun School of Business and Management, Donghua University, Shanghai, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2022, vol. 39, issue 01, 1-22

Abstract: In this paper, we conduct an incentive study on the adoption of the blockchain technology in a two-period model with retailer’s use of strategic inventory. Without the adoption of the blockchain technology, the retailer has private information regarding the market size. We investigate the retailer’s voluntary signaling decisions via his pricing and strategic inventory decisions. We determine the retailer’s equilibrium price and the manufacturer’s optimal wholesale price. Both separating and pooling equilibria are discussed, and the unique lexicographically maximum sequential equilibrium is identified. With the adoption of the blockchain technology, there is no information asymmetric between the supply chain members. We find that the manufacturer has the incentive to adopt the blockchain technology when the demand uncertainty is moderate to high, and the retailer has the incentive to adopt the blockchain technology when the demand uncertainty is low or high. When the manufacturer and the retailer have a misalignment in the adoption of the technology, a central planner can help to achieve coordination.

Keywords: Blockchain technology; signaling; strategic inventory; supply chain management (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1142/S0217595921400248

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