Blockchain adoption and strategic contracting in a green supply chain considering market segmentation

Abstract

Purpose

The aim of this study is to examine the influence of consumer preferences for overseas green products and the implementation of blockchain technology on the performance of a supply chain, which comprises an overseas manufacturer and a domestic e-commerce platform. This research endeavors to identify the optimal pricing decisions and strategies for both the manufacturer and the platform in the context of the expanding e-commerce and globalization of the economy.

Design/methodology/approach

The authors propose and analyze four distinct models based on the selection of selling contracts by the manufacturer and the adoption strategy of blockchain by the platform, using game theory to obtain the optimal solutions for these models.

Findings

The authors show that consumer migration promotes the manufacturer's green inputs, while the expansion of green consumer proportion is not conducive to it. They also show that blockchain technology has the potential to effectively limit manufacturer cannibalization. Interestingly, the study reveals a cascading effect of advantage where the manufacturer's profit variation trend changes only with the integration of pricing power advantage and blockchain technology inputs. This effect suggests that the equilibrium strategy is achievable under the agency contract with blockchain adoption, while Pareto improvement can be obtained with blockchain technology under both selling contracts.

Research limitations/implications

This research could be extended in several possible directions. First, future work could explore outsourcing strategies for overseas manufacturers. Second, more types of consumer heterogeneity and different risk preferences could be considered. Third, this study can be extended by further exploring the design of mechanisms under asymmetric demand information to make the model more realistic.

Originality/value

The authors examine the impact of market segmentation and consumer preferences on green supply chain decisions, and analyze supply chain members' strategic choices for selling contracts and blockchain adoptions. The research also sheds light on the theoretical underpinnings and practical applications of green supply chain development and blockchain applications.

Citation

Xu, W., Yan, W., Song, B. and He, J. (2023), "Blockchain adoption and strategic contracting in a green supply chain considering market segmentation", Industrial Management & Data Systems, Vol. 123 No. 10, pp. 2704-2732. https://doi.org/10.1108/IMDS-02-2023-0080