The Cost-sharing Mechanism for Blockchain Technology Adoption in the Platform-led E-commerce Supply Chain

Abstract

This paper considers a platform-led e-commerce supply chain consisted of a supplier and an online platform. The supplier distributes products through the online platform operated with reselling or agency mode. The online platform invests in blockchain technology and the supplier shares partial investment cost. The paper formulates four platform Stackelberg models to analyze the optimal pricing and information traceability level without and with cost-sharing mechanism under two platform modes. Through the model comparison, the impact of the cost-sharing mechanism and the choice of the platform mode are investigated. Results suggests that the cost-sharing mechanism is effective in improving two members profits under two platform modes. Without cost-sharing mechanism, the supplier benefits from the agency platform mode while the online platform benefits from the reselling platform mode, and thereby the win-win outcome cannot be achieved between two members. With cost-sharing mechanism, the supplier benefits from the agency platform mode while the online platform benefits from the reselling (agency) platform mode with a low (high) blockchain investment efficiency, and thereby the win-win outcome can be achieved between two members through the agency platform mode under a high blockchain investment efficiency. This paper further extends to the case that the online platform operates with hybrid mode, and derive the insights into the value of the agency platform mode in achieving the win-win outcome through the cost-sharing mechanism.

Keywords

Blockchain technology / online platform / reselling / agency selling / cost-sharing

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Systems Engineering Society of China and Springer-Verlag GmbH Germany