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

In: TECHNOLOGY-DRIVEN SUPPLY CHAIN MANAGEMENT IN INDUSTRIAL 4.0 ERA Resilience, Responsiveness and Reliability

Author

Listed:
  • Jianheng Zhou
  • Qingying Li

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.

Suggested Citation

  • Jianheng Zhou & Qingying Li, 2025. "The Incentive Study in the Blockchain Era: A Two-Period Strategic Inventory Game," World Scientific Book Chapters, in: Bin Shen & Ciwei Dong & Chi To Ng (ed.), TECHNOLOGY-DRIVEN SUPPLY CHAIN MANAGEMENT IN INDUSTRIAL 4.0 ERA Resilience, Responsiveness and Reliability, chapter 5, pages 127-148, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789819808588_0005
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    More about this item

    Keywords

    Supply Chain; Digitalization; New Technology; Resilience; Responsiveness; Reliability;
    All these keywords.

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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