Blockchain Adoption in a Supply Chain with Market Power
SSRN Electronic Journal
2021
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- 11Captures
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Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
Citation Benchmarking is provided by Scopus and SciVal and is different from the metrics context provided by PlumX Metrics.
Article Description
We examine a supply chain with a single risk-averse manufacturer who purchases from suppliers and sells to consumers. Within this context, we focus on two channels that drive blockchain adoption by the manufacturer: manufacturer risk aversion and consumer information asymmetry. With regard to the first channel, blockchain enables efficient tracing of defective products so that the manufacturer can selectively recall defective products rather than conducting a full recall. This tracing ability reduces the risk involved in the manufacturer purchasing from multiple suppliers and thereby leads the manufacturer to endogenously diversify across suppliers when blockchain is adopted. The diversification enhances the manufacturer's welfare due to her risk aversion and thus drives her to adopt blockchain. With regard to the second channel, blockchain stores details from the manufacturing process and reveals them to consumers, thereby ameliorating consumer information asymmetry. This reduction in information asymmetry improves consumer decision-making which, in isolation, would enhance consumer welfare. However, the manufacturer responds by increasing the consumer price, thereby transferring potential consumer welfare gains to the manufacturer, and consequently serving as a second channel to drive blockchain adoption by the manufacturer.
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