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ABSTRACT Blockchain technology, when combined with smart contracts, enables buyers to distinguish between greenwashed and genuinely eco‐friendly products. The presence of counterfeit items can severely impact supply chains by diminishing brand value, eroding consumer confidence, and undermining market trust. This article explores how smart contracts can help mitigate the circulation of counterfeit goods and safeguard brands by establishing institutional trust through tamper‐proof data, enhanced transparency, and improved traceability. Information asymmetry on digital marketing platforms significantly contributes to the proliferation of greenwashed counterfeit goods. We introduce an infection‐leakage model based on anecdotal case evidence to explain the interactions between different market types. The transition from relying solely on traditional written contracts, certifications, and brands to incorporating blockchain and smart contract technology is analyzed for its potential to strengthen supply chains and curtail the spread of counterfeit greenwashed products. Blockchain technology provides consumers with detailed product information, empowering them to choose authentic green products over counterfeit “lemons.” Our theoretical framework suggests that this shift to blockchain smart contracts can reduce the transaction costs associated with counterfeit infiltration, thereby protecting brands and the intellectual property rights of authentic sustainable products.
Silkoset et al. (Mon,) studied this question.