Blockchain and pricing strategies in supply chains considering consumer traceability preference and power structure

Information asymmetry, a common challenge in supply chains, undermines operational efficiency and hinders effective decision-making. Blockchain has emerged as a transformative solution to address this longstanding challenge. This paper explores blockchain investment within supply chain contexts, incorporating varying degrees of consumer preferences regarding traceability. By developing a game-theoretic model with diverse power structures, we investigate chain members’ pricing and blockchain investment strategies under conditions of information asymmetry regarding consumer traceability preferences. Our findings indicate that blockchain investment strategies are jointly determined by the proportion of high-type consumers and the associated usage cost. Both the retailer and the manufacturer will invest in blockchain technology only if the proportion of high-type consumers exceeds their respective investment thresholds. Investment propensity declines with higher blockchain implementation costs. If the incentive is insufficient to meet both parties’ thresholds, neither will invest. When the high-type consumer proportion lies between the two thresholds, low blockchain costs prompt manufacturer-led adoption, whereas high costs shift the investment initiative to the retailer. Additionally, blockchain can create win-win outcomes in supply chains under specific conditions. However, the extent of blockchain value realisation depends on the power structure. From a social welfare perspective, blockchain investments can enhance consumer surplus and social welfare.