Blockchain Adoption and Organic Subsidy in an Agricultural Supply Chain Considering Market Segmentation

Abstract

The quality authenticity of organic agricultural products has always been a hot issue for consumers. Blockchain’s advantages in information traceability and preventing data from being tampered with can reduce fake and counterfeit products, increasing the consumers’ trust in the quality of organic agricultural products. Considering market segmentation of consumer types in organic agricultural products (OPs) and conventional agricultural products (CPs), this study builds a game-theoretical model to explore how participants decide between blockchain traceability platforms and organic subsidy strategies. Results show that the producer should introduce the blockchain when the fraction of blockchain technology’s total cost shared by the producer is smaller and the fixed cost of implementing blockchain is higher or when the fraction of blockchain technology’s total cost shared by the producer is higher and the fixed cost of implementing blockchain is lower. The retailer is inclined to an organic subsidy, and the smaller the market proportion of undifferentiated-conscious consumers (UCCs), the more inclined the retailer is to the organic subsidy strategy. In addition, the market share of UCCs positively promotes the sales quantities and supply chain profits of CPs but is not conducive to the sales quantities of OPs.

Contracting Supply Chains Considering Retailers’ Marketing Efforts

“…Li et al [44] investigated the marketing strategy problem of community group buying on the supply chain, showing that network externalities and the marketing efforts by the platform are important factors affecting the revenue of the platform and the head of the group. Other scholars have considered retailers' sales efforts along with manufacturers' quality improvements [45], carbon emission reductions [46], organic subsidies [47], and social learning [48].…”