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Managing the Product-Counterfeiting Problem with a Blockchain-Supported E-Commerce Platform

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  • Ji Jiang

    (School of Information Technology and Management, University of International Business and Economics, Beijing 100029, China)

  • Jin Chen

    (School of Information Technology and Management, University of International Business and Economics, Beijing 100029, China)

Abstract

As a disruptive tool, blockchain technology can eradicate the product-counterfeiting problem in supply chains. However, a blockchain-supported platform charges an operating fee to legitimate manufacturers and retailers for product traceability and authentication. In this study, we employ enterprise profit-driven analytical models using Stackelberg equilibrium theory and highlight the values of blockchain-supported e-commerce platforms in addressing the product-counterfeiting problem. To measure the actual benefits of blockchain technology, we compare the profits of all agents in two different supply chains, traditional and blockchain-supported. Results show that the application of blockchain technology is not always beneficial to manufacturers, retailers, and customers. However, when the manufacturing cost of a legitimate manufacturer is sufficiently high, the manufacturer generates more profits using blockchain technology. Further, for a price-sensitive market, a retailer tends to trade in a blockchain-supported e-commerce platform if the retailer’s qualification in the platform is lower than that in a traditional supply chain, and the manufacturing cost of the counterfeit manufacturer in the platform is higher than that in a traditional supply chain.

Suggested Citation

  • Ji Jiang & Jin Chen, 2021. "Managing the Product-Counterfeiting Problem with a Blockchain-Supported E-Commerce Platform," Sustainability, MDPI, vol. 13(11), pages 1-15, May.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:6016-:d:562990
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    References listed on IDEAS

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